Farm Business Survey
2014/2015
Organic Farming in England
Charles Scott
May 2016
RBR
Rural Business Research
independent research, data and analysis
Farm Business Survey
2014/15
Organic Farming in England
Charles Scott
May 2016
ISBN: 978-0-903698-63-4
RBR at Newcastle University,
School of Agriculture, Food & Rural Development,
Newcastle University,
Newcastle upon Tyne,
NE1 7RU,
UK
Tel: 0191-208-6902
Fax: 0191-208-6720
E-mail: [email protected]
Website: http://www.ncl.ac.uk/afrd/survey/#farmbenchmarkingservice
Organic Farming in England 2014/15
Acknowledgments
The Rural Business Research (RBR) Consortium thanks sincerely all the farmers who
have voluntarily provided records and information on which the annual Farm
Business Survey, and this report, is based.
The basic information on which this report is based was collected on behalf of, and
largely financed by, the Department for Environment, Food and Rural Affairs and is
Crown Copyright. The views expressed in this report are those of the authors and are
not necessarily shared by other members of RBR or by the Department for
Environment, Food and Rural Affairs.
i
Organic Farming in England 2014/15
Foreword to the Tenth Series
This series of reports on the economics of agriculture and horticulture in England
celebrates ten years of Rural Business Research (RBR) providing independent data
and analysis to the individual sectors of the agricultural and horticultural industry.
Drawing upon Farm Business Survey data from the 2014/15 financial year our reports
are set against a modest decrease in overall Farm Business Income (FBI) of around
8% to an average £39,700 per farm. Of this overall measure of farm business
profitability, the income derived from the Single Payment Scheme accounted for
around 55%, highlighting the importance of support payments to the average farm
business in England. The 2014/15 data relates to the 2014 harvest / production year –
since this time there have been some marked downturns in a number of output prices
for farm businesses – it is therefore clear that the importance of policy support to
businesses at the start of 2016 is even greater than the above data indicates.
Over the ten years that RBR has been presenting this series of reports, farm
businesses have witnessed widely fluctuating fortunes due to the vagaries of world
market input and output prices and fluctuations in weather patterns. Throughout this
period our reports have sought to demonstrate the variation in performance across
farm businesses, within the specific sectors covered in each report, and also to provide
businesses with the independent data required to benchmark their own performance
and explore possibilities for production within the sectors. Ten years on, our aim to
provide comprehensive and independent analysis remains at the very core of our work
on the Farm Business Survey research programme for England.
The wider agricultural and horticultural market place in the mid-2010s clearly
demonstrates the need for farm businesses to focus on the market opportunities for
their produce and to understand the wider economic environment in which they
operate. There are a number of technical and weather-related issues facing farm
businesses at the start of 2016. But arguably the largest political issue over recent
decades – the EU referendum which the current government will hold on the 23 June
2016 – represents the greatest uncertainty. There will be numerous debates and
discussions about this major political issue over the coming months and, potentially,
years. Given the importance of the EU Common Agricultural Policy support to the
average FBI figures for 2014/15, the outcome of the EU referendum will be closely
watched by those managing UK farm businesses. At the same time, the wider global
economy continues to exhibit rather sluggish performance, with UK inflation
remaining around the 0% mark, oil prices substantially lower than a year ago and
signs of any interest rate increase in the UK being continually pushed further out into
the future. With recent price volatility, and generally lower output prices, it remains
important for businesses to plan ahead and focus on financial margins in contrast to
physical output performance.
Against this wider economic context we hope that this tenth series of reports helps
farm businesses in England to examine and benchmark their own performance. Our
ii
Organic Farming in England 2014/15
research work within the FBS programme could not be possible without the direct
support of our farmer and grower co-operators and the wider support of agricultural
and horticultural businesses and sector stakeholders; our thanks are given to them all.
Professor Paul Wilson
Chief Executive Officer, Rural Business Research
March 2016
www.ruralbusinessresearch.co.uk
iii
Organic Farming in England 2014/15
Executive Summary
Total land in organic food production increased in the late 2000s to a peak in 2009 but
has subsequently reduced, largely due to the effects of the 2007/08 financial crisis and
the associated fall in consumer spending on organic food. Defra (2016) report that the
area in England under full organic production in 2015 was at a six year low of
293,723ha, and the area under conversion at a ten year low of 10,016ha. The number
of organic producers has also fallen for the fifth year in a row (to 2336 in 2015)
although the number of organic processors in England has increased for the third
consecutive year to 2098 in 2015.
This report uses data from the Farm Business Survey of 1880 farms of which 150 are
organic. Several measures of performance have been used in this report though Farm
Business Income (FBI) is the main measure. Farm Business Output (FBO) has been
split into four sources; agriculture, agri-environment, diversification and the Single
Farm Payment. Total costs have also been broken down into selected cost centres.
Organic farms have been compared year-on-year using an identical sample and a full
sample comparison of organic and non-organic farms is made for the current year,
2014/15. Gross margin data for individual organic crop and livestock enterprises is
presented whenever enterprise sample size is 10 farms or more.
The majority of organic farm types had a lower Farm Business Output than their nonorganic equivalents largely due to lower output from agriculture. However, most
organic farm types had lower costs than their non-organic counterparts principally due
to organic farms using fewer agricultural inputs. Organic farms had a lower FBI than
non-organic farms for all farm types except LFA grazing farms. On a year-on-year
basis, FBI has increased for all organic farm types except cropping and mixed farms.
Organic cropping farms were typically smaller than their non-organic counterparts by
an average of 83 hectares. Organic cropping farms made an average FBI of £28,854,
about £19,000 less than the non-organic cropping farms – this difference is significant
at the farm level but not at the per hectare level. This was principally due to the
greater output from agriculture (£326,630) that non-organic farms received compared
to organic farms (£151,432). Organic cropping farms saw an average decrease in FBI
of £4,332 between 2013/14 and 2014/15.
The FBI for organic horticulture farms was greater than that of the non-organics
(although not significant). Non-organic horticulture farms operated a much more
intensive operation than organic horticulture farms; FBO was £378,046 for nonorganics versus £78,385 for organic farms and total costs for non-organics were
£345,760 but just £58,059 for organic farms.
Organic dairy farms generated an increase in FBO of £3,225 compared to the
previous year. Total costs reduced by £2,939 leading to an average increase in FBI of
£5,872. Organic dairy farms had a lower (but not significant) FBI than their nonorganic counterparts by £9,398. Organic dairy farms were typically smaller in area
with an average of 178.3 Grazing Livestock Units (GLU) 83.3 less than non-organic
dairy farms.
iv
Organic Farming in England 2014/15
As has been the case for some years organic LFA grazing farms remained more
profitable than their non-organic counterparts with an average FBI of £43,467,
£29,281 more than similar non-organic farms. This difference is significant at both
the farm and per hectare level. This was due to the greater output of organic farms
across all output sources and despite a considerably higher total costs figure. The
average size of an organic LFA grazing farm is 205.9 adjusted hectares (adj. ha)
carrying 141.2 GLU whereas a non-organic farm is typically 115.3 adj. ha and carries
85.2 GLU.
Organic lowland grazing farms saw an average increase in FBI between 2013/14 and
2014/15, rising from £9,157 to £12,478. So while the FBO fell by £1,443, the total
costs fell by a greater amount of £4,678. In 2014/15 organic lowland grazing farms
had an average FBI of £14,452 compared to their non-organic counterparts’ FBI of
£18,799 – and this difference was significant (at both the farm and per hectare level).
The average FBO for organic farms was £19,876 less than the FBO for the nonorganics, primarily due to a greater output from agriculture. Organic farms had lower
total costs by £15,549.
On average, organic mixed farms had a lower FBI than their non-organic equivalents
by £7,627 (but not significant). Organic mixed farms spent £63,327 less in total costs,
but also had a lower FBO by £68,571. Organic mixed farms saw a fall in FBI of
£6,833 from 2013/14 to 2014/15 (to £13,705) this due to a fall in FBO of £15,932 and
despite a £9,388 reduction in total costs.
v
Organic Farming in England 2014/15
Contents
Acknowledgments ............................................................................................................... i
Foreword to the Tenth Series .........................................................................................ii
Executive Summary ..........................................................................................................iv
Contents ................................................................................................................................vi
Tables.................................................................................................................................. viii
1
2
3
Organic farming in the United Kingdom ............................................................ 1
1.1
Area ........................................................................................................................ 1
1.2
Producers ............................................................................................................. 3
1.3
Output and sales ................................................................................................ 3
Methods ......................................................................................................................... 5
2.1
Data sample: farm type and region ............................................................. 5
2.2
Data sample: farm type and size .................................................................. 6
2.3
Data sample: Limitations ................................................................................ 7
2.4
Farm size by various measures .................................................................... 7
WHOLE-FARM RESULTS ........................................................................................... 9
3.1
Presentation of results .................................................................................... 9
3.2
Farm Business Output .................................................................................. 10
3.3
Costs .................................................................................................................... 11
3.4
Farm Business income.................................................................................. 12
3.4.1 Organic farms year on year (identical sample) ......................................... 12
3.4.2 Organic versus non-organic (full sample) ................................................... 14
3.5
4
Net Farm Income ............................................................................................ 17
Detailed costs and returns by farm type......................................................... 19
4.1
Cropping ............................................................................................................ 19
4.2
Horticulture ..................................................................................................... 22
4.3
Dairy ................................................................................................................... 25
4.4
LFA grazing ....................................................................................................... 28
4.5
Lowland grazing farms ................................................................................. 31
4.6
Mixed farms ...................................................................................................... 34
vi
Organic Farming in England 2014/15
5
Enterprise Gross Margins .................................................................................... 37
5.1
Data sample ...................................................................................................... 37
5.2
Organic cropping enterprises .................................................................... 38
5.3
Organic livestock enterprises .................................................................... 44
6
APPENDIX 1 – ORGANIC CROPPING .................................................................. 54
7
APPENDIX 2 – ORGANIC LOWLAND CATTLE AND SHEEP .......................... 65
8
APPENDIX 3 – ORGANIC LFA CATTLE AND SHEEP ....................................... 75
9
APPENDIX 4 – ORGANIC DAIRY PRODUCTION .............................................. 79
10 APPENDIX 5 – REPORTS IN THIS SERIES ......................................................... 83
11 APPENDIX 6 – DEFINITION OF TERMS ............................................................. 84
REFERENCES ...................................................................................................................... 91
vii
Organic Farming in England 2014/15
Tables
Table 1 Product shares of the UK organic market and changes in sales value 2014/15 ........................... 4
Table 2 The UK organic market in 2015 ....................................................................................................................... 5
Table 3 The distribution of surveyed organic farms by farm type 2014/15 ................................................... 6
Table 4 The distribution of surveyed organic farms by region 2014/15 ......................................................... 6
Table 5 Organic sample distribution by size (2010 Standard Output) ............................................................. 7
Table 6 Change in average organic FBI by farm type 2013/14 and 2014/15 .............................................12
Table 7 Change in average organic FBI/farm by farm type 2013/14 and 2014/15 .................................13
Table 8 Change in average organic FBI/ha (UAA) by farm type 2013/14 and 2014/15 ........................13
Table 9 Change in average FBI/ha (TAA) by farm type group 2013/14 and 2014/15 ............................13
Table 10 Average FBI for organic and non-organic farms by farm type 2014/15 ....................................15
Table 11 Statistical differences in average FBI/farm between organic and non-organic farms
2014/15....................................................................................................................................................................................16
Table 12 Statistical differences in average FBI/ha between organic and non-organic farms 2014/15
.....................................................................................................................................................................................................16
Table 13 Differences in NFI/farm between organic and non-organic farms by farm type 2014/15 ..17
Table 14 Differences in average NFI/ha between organic and non-organic farms by farm type
2014/15....................................................................................................................................................................................18
Table 15 Cropping farms, organic identical sample 2013/14 and 2014/15 ................................................20
Table 16 Cropping farms, organic and non-organic, full sample 2014/15 ...................................................21
Table 17 Horticulture farms, organic identical sample 2013/14 and 2014/15 .........................................23
Table 18 Horticulture farms, organic and non-organic, full sample 2014/15 ............................................24
Table 19 Dairy farms, organic identical sample 2013/14 and 2014/15........................................................26
Table 20 Dairy farms, organic and non-organic, full sample 2014/15...........................................................27
Table 21 LFA grazing farms, organic identical sample 2013/14 and 2014/15 ..........................................29
Table 22 LFA grazing farms, organic and non-organic, full sample 2014/15 .............................................30
Table 23 Lowland grazing farms, organic identical sample 2013/14 and 2014/15 ................................32
Table 24 Lowland grazing farms, organic and non-organic, full sample 2014/15 ...................................33
Table 25 Mixed farms, organic identical sample 2013/14 and 2014/15 .......................................................35
Table 26 Mixed farms, organic and non-organic, full sample 2014/15 ..........................................................36
Table 27 Sample distribution of organic crop margin data (>10 records) by robust farm type and
size (2010SO) .........................................................................................................................................................................38
Table 28 Sample size for organic crop gross margin analysis ...........................................................................38
Table 29 Organic winter wheat gross margin ..........................................................................................................39
Table 30 Organic spring wheat gross margin...........................................................................................................39
Table 31 Organic spring barley gross margin ..........................................................................................................40
Table 32 Organic winter oats gross margin ..............................................................................................................41
Table 33 Organic spring beans gross margin ...........................................................................................................41
Table 34 Organic spring oats gross margin...............................................................................................................42
viii
Organic Farming in England 2014/15
Table 35 Organic field vegetables gross margin ......................................................................................................43
Table 36 Organic flowers etc. gross margin ..............................................................................................................43
Table 37 Sample distribution of organic livestock margin data (>10 records) by robust farm type
and size (2010SO) ................................................................................................................................................................44
Table 38 Sample size for organic livestock gross margin analysis ...................................................................44
Table 39 Organic dairy cows gross margin – sample ............................................................................................45
Table 40 Organic dairy cows gross margin – premium ........................................................................................46
Table 41 Organic dairy followers gross margin .......................................................................................................47
Table 42 Organic LFA Suckler cows gross margin ..................................................................................................48
Table 43 Organic lowland suckler cows gross margin ..........................................................................................49
Table 44 Organic fat cattle from suckler bred calves or stores gross margin ..............................................50
Table 45 Organic store cattle from suckler bred calves or stores gross margin .........................................51
Table 46 Organic lowland sheep gross margin ........................................................................................................52
Table 47 Organic LFA sheep gross margin .................................................................................................................53
Figures
Figure 1 UK land in organic food production 2004-2015 _______________________________________________ 1
Figure 2 Land area in organic production by UK country _______________________________________________ 2
Figure 3 Share of Utilised Agricultural Area (UAA) in organic production in the UK, France,
Germany and Italy _________________________________________________________________________________________ 2
Figure 4 Organic producers and processors in the UK ___________________________________________________ 3
Figure 5 UK sales of organic products ____________________________________________________________________ 4
Figure 6 Farm size by Standard Output and area _______________________________________________________ 8
Figure 7 Farm Business Output per hectare by cost centre and farm type, organic and non-organic
farms, 2014/15 __________________________________________________________________________________________ 10
Figure 8 Average variable and fixed costs for organic and non-organic farms by farm type, 2014/15
___________________________________________________________________________________________________________ 11
Figure 9 Average Farm Business Income (FBI/farm) on organic farms by farm type group 2013/14
and 2014/15 _____________________________________________________________________________________________ 12
Figure 10 Average FBI/farm for organic and non-organic farms by farm type 2014/15 ___________ 14
Figure 11 Average FBI/ha (TAA) for organic and non-organic farms by farm type 2014/15 _______ 15
Figure 12 Average NFI/farm for organic and non-organic farms by farm type 2014/15 ___________ 17
Figure 13 Average NFI/ha for organic and non-organic farms by farm type 2014/15 ______________ 18
ix
Organic Farming in England 2014/15
1
Organic farming in the United Kingdom
1.1 Area
The total organic agricultural area consists of land certified as fully organic and land
in conversion to organic. Total UK land in organic food production peaked in 2008/09
at 743,516 hectares but has declined thereafter to 521,398 hectares in 2015. The area
in conversion, having peaked in 2007/08 at 157,893 hectares then decreased to a low
of 19,675 hectares in 2014, but has seen a slight upturn to 20,635 hectares in 2015.
Figure 1 UK land in organic food production 2004-2015
800
700
hectares ('000)
600
500
400
300
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Total fully organic and in conversion land area
Fully organic land area
In conversion land area
(Source: DEFRA 2016)
The area of organic farmland in England has followed a similar pattern to that of the
UK as a whole (Figure 2) with 303,739 hectares being classified as organic in 2015,
down from a peak of 391,761 hectares in 2010 (DEFRA 2016). Scotland’s organic
area has been in decline for some years and at 126,267 hectares (in 2015) is only 29%
of the area that was under organic production in 2002. Areas under organic
production in both Wales and Northern Ireland have also been in decline for some 5
or 6 years.
1
Organic Farming in England 2014/15
Figure 2 Land area in organic production by UK country
hectares ('000)
450
400
350
300
250
200
150
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
England
Wales
Scotland
Northern Ireland
(Source: DEFRA 2016)
The UK has always had a much lower percentage of total utilised agricultural area
(UAA) occupied by organic farming compared to Italy and Germany. France has
traditionally lagged behind the UK in the proportion of organic UAA, but sustained
increases in conversion since 2009 mean that France now has a higher organic
percentage of UAA than the UK (Figure 1.3).
Figure 3 Share of Utilised Agricultural Area (UAA) in organic production in the
UK, France, Germany and Italy
%UAA in organic production
14
12
10
8
6
4
2
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UK
France
Germany
Italy
(Source: Eurostat 2016)
2
Organic Farming in England 2014/15
1.2 Producers
The number of organic producers and processors in the UK peaked in 2007/08, a year
earlier than the area of organic land (2008/09). Producer and processor numbers have
been steadily declining throughout the UK since 2007 (Figure 4) to a low of 6,002 in
2014 but have since increased slightly to 6,056 in 2015. The number of organic
producers and processors continues to decline in Wales but has been increasing in
Northern Ireland since 2013. England has considerably greater numbers of organic
producers and processors (4,579 in 2015) than other countries in the UK and has seen
the largest increase in 2015 – these were all organic processors rather than producers.
Scotland has more land in organic production than Wales (Figure 2) but has fewer
producers and processors; this is due to a greater proportion of Scottish organic farms
being large upland hill farms.
Figure 4 Organic producers and processors in the UK
Number of producers/processors
6 000
5 000
4 000
3 000
2 000
1 000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
England
Scotland
Wales
Northern Ireland
(Source: DEFRA 2016)
1.3 Output and sales
Sales of organic products in the UK increased by 4.9% in 2015 to a total sales value
of £1.95bn (Figure 5). This is the fourth annual increase in a row to a five-year high
and only slightly below the pre-recession high of £2.11bn in 2008.
3
Organic Farming in England 2014/15
Figure 5 UK sales of organic products
2500
60.0
50.0
2000
40.0
30.0
1500
20.0
1000
0.0
% change
£ million
10.0
-10.0
500
-20.0
-30.0
0
-40.0
UK sales (£)
% change
(Source: Soil Association, 2016)
The organic market share and the change in sales value from 2014 to 2015 for a
number of products is given in Table 1. While sales values have increased for a
number of organic products the organic red meat sector is one area where this trend is
clearly in reverse.
Table 1 Product shares of the UK organic market and changes in sales value
2014/15
2014/15 % change
2015
in sales value
% share*
Cereals
5.6
1.8
Vegetables
-0.3
7.9
Fruit
10.6
8.0
Beef
-5.0
3.3
Lamb
-11.2
1.0
Pork
-4.2
0.2
Poultry
13.1
4.5
Eggs
2.6
3.8
Milk
-2.2
11.1
Yogurt
2.1
11.1
Fresh Fish
25.1
1.0
* Multiple retail sales only (Source: Soil Association, 2016)
Product
4
Organic Farming in England 2014/15
In terms of market share by outlet, Table 2 describes how, by some considerable
margin, the supermarkets handle the bulk of UK organic produce. It is also quite clear
how alternative channels of consumption are realising higher growth rates in the
organic sector.
Table 2 The UK organic market in 2015
Outlet
Supermarkets
Catering
Box schemes
Other independent retailers
(Source: Soil Association, 2016)
2
proportion of
total sales (%)
growth in
2015 (%)
market value
(£ million)
69
3
12
16
3.2
15.2
9.1
7.5
1346
9
236
308
Methods
This report presents financial and physical farm data for the 2013/14 and 2014/15
financial years. Data were collected using the standard Farm Business Survey
methodology for all farms 1 by the six Rural Business Research (RBR) Units in
England; Newcastle University, Askham Bryan College, University of Nottingham,
University of Cambridge, University of Reading and Duchy College.
For the purpose of this report, an organic farm is defined as a farm business that has at
least 70% of the Utilisable Agricultural Area (UAA) certified as organic in 2014/15.
The organic farm data are presented as full and identical samples where applicable
and sample size allows. The data are analysed for comparisons between years and
with non-organic farms. Data from participating farms are used to compile a fully
reconciled management profit and loss account. The surveyed farms had financial
year-ends between 31st December 2014 and 5th April 2015 and consequently reflect
the 2014 lamb crop and the 2014 arable harvest.
2.1 Data sample: farm type and region
This report uses data from the Farm Business Survey of 1880 farms, 150 of which are
organic. Of the 150 organic farms, 128 are entirely organic; the remaining 22 farms
have some non-organic enterprises or land area. A further 27 farms have some
organic enterprises but with less than 70% of their UAA being classified as organic
are considered non-organic in this report. Organic enterprises from non-organic farms
may be included in the Gross margin analysis section of this report. The distribution
of surveyed organic farms by type and region are presented in Table 3 and Table 4.
1
Details of the data collection methodology for the farm accounting method used in England and
Wales by DEFRA, are available from:
https://www.gov.uk/government/collections/farm-business-survey
5
Organic Farming in England 2014/15
Table 3 The distribution of surveyed organic farms by farm type 2014/15
Robust farm type
Cereals
General cropping
Horticulture
Pigs
Poultry
Dairy
LFA Grazing
Lowland Grazing
Mixed
All farms
%
9
6
7
0
2
21
13
27
15
100
No.
13
9
10
0
3
32
20
40
23
150
Table 4 The distribution of surveyed organic farms by region 2014/15
Region
North East
North West
Yorks. & Humber
East Midlands
West Midlands
East of England
South East
South West
All farms
No
18
10
7
10
15
17
20
53
150
%
12
7
5
7
10
11
13
35
100
2.2 Data sample: farm type and size
The distribution of the sample by farm size is shown in Table 5. The farm size
categories are based on the 2010SO (Standard Output) methodology used by DEFRA
- see APPENDIX 6 – DEFINITION OF TERMS for more information. Farm area,
unless specified as Utilisable Agricultural Area (UAA) is the total adjusted area
(TAA) this includes: adjusted sole occupier rough grazing, adjusted shared grazing
and short term rentals (less than 1 year).
The 2014/15 dataset was evenly distributed overall across the size bands with each
band contributing approximately one third each, but within farm type groups the
distribution is somewhat less even. Dairy and lowland grazing farm types made up
the largest proportion of the data sample with 21% and 27% respectively.
6
Organic Farming in England 2014/15
Table 5 Organic sample distribution by size (2010 Standard Output)
Farm size band
All
% distribution
Small
(€2,500100,000)
54
36
Medium
(€100,000250,000
46
31
Large
(>€250,000)
50
33
All
150
100
2.3 Data sample: Limitations
Due to the small sample size (9) of the organic general cropping farm type this farm
type has been merged with organic cereals and the combined group is referred to as
cropping farms in this report. Further, there are no longer any organic pig farms in the
survey and insufficient poultry (3) farms to present their data.
In the organic horticulture group some care must be taken in interpreting the results.
The 2014/15 sample of 10 farms is composed of 3 subgroups: 2 specialist fruit, 5
specialist glass and 3 other horticulture i.e. not a uniform group of producers.
Furthermore the non-organic sample (186) has a subgroup composition of: 51
specialist fruit, 68 specialist glass, 33 specialist hardy nursery stock and 34 other
horticulture, clearly not perfectly comparable to the organic sample and hence the
degree of caution advised above.
While the sample size does allow a year-on-year comparison of horticultural farms,
the 2013/14 sample of 12 farms is composed of: 3 specialist fruit, 5 specialist glass
and 4 other horticulture, so whilst similar to the 2014 horticultural sample
distribution, is not exactly the same, so again care must be taken in interpreting the
identical sample results.
2.4 Farm size by various measures
The common measure of farm size by Standard Output (SO) need not necessarily
correspond to the area of land farmed. Figure 6 shows the weighted farm sizes for the
2014/15 sample measured by: SO, by farm area measured as Utilisable Agricultural
Area (UAA) and by total adjusted area (TAA). The measure of farm size by SO
represents business size in terms of agricultural output generated and allows for a
comparison of business size across farms of varying types. While there is little
difference between the area measurements of UAA and TAA in most groups, in the
case of LFA grazing farms there is a marked difference. The choice of farm size and
area measurement is therefore critical when benchmarking and making comparisons
across farm types.
7
Organic Farming in England 2014/15
360
500
300
400
240
300
180
200
120
100
60
Dairy
Horticulture LFA Grazing
Livestock
Farm size (2010SO)
Lowland
Grazing
Livestock
Farm size UAA (ha)
Mixed
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
0
Non-organic
0
Cropping
Farm size TAA (ha)
8
Farm size (hectares)
600
Organic
Farm size (2010SO)
Thousands
Figure 6 Farm size by Standard Output and area
Organic Farming in England 2014/15
3
WHOLE-FARM RESULTS
3.1 Presentation of results
This section presents summary data in the form of tables and figures giving
breakdowns of farm sizes, output sources, cost centres and a range of farm income
measures at both farm and hectare levels for cropping, horticulture, dairy, LFA
grazing, lowland grazing and mixed farms.
This report focuses on two main income measures; Farm Business Income (FBI) and
Net Farm Income (NFI). FBI has been the headline farm income measure since the
mid 2000’s; it represents the financial return to all unpaid labour (farmers and
spouses, non-principal partners and directors and their spouses and family workers)
and on all their capital invested in the farm business, including land and buildings.
However, FBI excludes imputed rental values for owner-occupied land and unpaid
labour, both of which are included in NFI.
NFI “was designed as a measure which would allow individual farms of different
tenure, business organisation and indebtedness to be compared directly with one
another on a consistent basis” (SEERAD, 2006: p. 10) and is thus a good
benchmarking measure. However unlike FBI, interest payments, director’s
remuneration and ownership costs are not considered in NFI.
A further measure of Management and Investment Income (MII) has also been
included in the farm type tables (Table 15 to Table 26). MII, like NFI, provides a
good benchmarking tool for farmers; it represents the return to the farm after the
subtraction of the farmer and spouse’s own manual labour. A definition of terms
explaining the various income measures is included in APPENDIX 6 – DEFINITION
OF TERMS.
The measure of Farm area used throughout this report, unless otherwise specified, is
the total adjusted area (TAA) including adjusted common grazing and short term lets
taken in (less than 1 year). The area measure of Utilisable Agricultural Area (UAA)
differs from the total adjusted area in that it excludes common grazing, does not
“adjust” the area of sole-occupier rough grazing and excludes short term lets. See
APPENDIX 6 – DEFINITION OF TERMS.
9
Organic Farming in England 2014/15
3.2 Farm Business Output
Figure 7 Farm Business Output per hectare by cost centre and farm type,
organic and non-organic farms, 2014/15
4,000
3,500
£/ha (TAA)
3,000
2,500
2,000
1,500
1,000
500
LFA grazing
Mixed
Dairy
Single Payment Scheme
Agri-environment and other payments
Horticulture
(/10)
Cropping
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
0
Lowland
grazing
Diversification & miscellaneous
Agriculture
note: Horticulture data presented as 1/10th of actual
Figure 7 shows the composition of Farm Business Output per hectare for organic and
non-organic farms by farm type for the 2014/15 sample. With the exception of LFA
grazing, non-organic farms achieved greater Farm Business Output than their organic
equivalents. Agriculture remained the largest component of Farm Business Output for
all farm types both organic and non-organic, with non-organic farms consistently
generating a higher Agricultural output per hectare than their organic counterparts.
Organic farms however, earned consistently more through agri-environment schemes
than non-organic farms. Organic farms also earned more per hectare from the Single
Payment Scheme in all groups except horticulture and dairy. Earnings from
diversification are varied both across farm types and between organic and non-organic
farm groups.
10
Organic Farming in England 2014/15
3.3 Costs
Figure 8 Average variable and fixed costs for organic and non-organic farms by
farm type, 2014/15
4000
3500
£/ha (TAA)
3000
2500
2000
1500
1000
500
LFA grazing
Mixed
Net Farm Income
Dairy
Horticulture
(/10)
Fixed costs
Cropping
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
Non-organic
Organic
0
Lowland
grazing
Variable costs
th
note: Horticulture data presented as 1/10 of actual
For all farm types variable costs per hectare were greater for non-organic farms than
organic farms. There was a mixed picture for fixed costs with differences between
organic and non-organic farms being only slight in most farm types. Organic LFA
grazing, mixed and lowland grazing farms had higher fixed costs than the non-organic
farms of these types and non-organic dairy, horticulture and cropping farm types had
higher fixed costs than the organic farms of these types (Figure 8).
The fixed costs presented here are as for the calculation of Net Farm Income (NFI)
hence include unpaid family labour (excluding farmer and spouse) and an imputed
rent for owned land – see APPENDIX 6 – DEFINITION OF TERMS. Hence NFI
plus costs equals total farm output (net of profit or loss on the sale of fixed assets).
11
Organic Farming in England 2014/15
3.4 Farm Business income
3.4.1 Organic farms year on year (identical sample)
Thousands
Figure 9 Average Farm Business Income (FBI/farm) on organic farms by farm
type group 2013/14 and 2014/15
80
70
60
FBI/farm (£)
50
40
30
20
10
0
Cropping
Horticulture
2013/14
Dairy
LFA Grazing
Livestock
Lowland
Grazing
Mixed
2014/15
Table 6 Change in average organic FBI by farm type 2013/14 and 2014/15
2013/14 (identical sample)
Farm type
Sample
farms
No.
farms
weighted
FBI £/farm
Cropping
18
321
35,800
Horticulture
10
247
11,400
Dairy
32
225
68,900
LFA Grazing
20
117
36,600
Lowland
33
745
9,200
Grazing
Mixed
21
258
20,500
(FBI/farm figures rounded to nearest hundred)
2014/15 (identical sample)
FBI £/ha
(TAA)
Sample
farms
No.
farms
weighted
262
1,064
468
184
18
10
32
20
384
350
264
102
28,300
20,300
74,700
43,500
221
1,705
505
211
92
33
777
12,500
134
168
21
280
13,700
119
FBI £/farm
FBI £/ha
(TAA)
12
Organic Farming in England 2014/15
Table 7 Change in average organic FBI/farm by farm type 2013/14 and 2014/15
FBI/Farm (£)
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
2013/14
Mean
35,794
11,440
68,869
36,558
9,157
20,538
2014/15
Mean
28,317
20,290
74,741
43,467
12,478
13,705
Difference
-7,476
8,850
5,872
6,909
3,321
-6,833
Significance
***
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
Table 8 Change in average organic FBI/ha (UAA) by farm type 2013/14 and
2014/15
FBI/ha UAA (£)
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
2013/14
Mean
263
1,064
492
107
93
167
2014/15
Mean
223
1,705
546
130
130
119
Difference
-40
642
54
23
37
-48
Significance
**
*
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
Table 9 Change in average FBI/ha (TAA) by farm type group 2013/14 and
2014/15
FBI/ha TAA (£)
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
2013/14
Mean
262
1,064
468
184
92
168
2014/15
Mean
221
1,705
505
211
134
119
Difference
-41
642
36
27
42
-48
Significance
**
*
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
Figure 9 and Table 6 show FBI/farm and FBI/ha (UAA) for organic farm types using
an identical sample for 2013/14 and 2014/15. While there appear to be some increases
and decreases in FBI across the groups, these changes are mostly not significant as
shown by the analysis presented in Table 7 and Table 8 (using t-tests throughout).
Organic horticulture farms however did show a statistically significant increase of
almost £9,000 per farm from 2013/14 to 2014/15 (Table 7) and a moderate increase
on a per hectare (UAA) basis (Table 8). Lowland grazing farms are the only other
farm group to show any statistically significant increase in FBI/ha (UAA) albeit
slight. Table 9 presents FBI per hectare TAA for an identical sample in 2013/14 and
13
Organic Farming in England 2014/15
2014/15. As for FBI/ha (UAA) above, only the horticulture and lowland grazing farm
groups show any significant change (increase) in FBI/ha (TAA) and at the same level
as above – as might be expected for two groups where UAA is typically identical or
very close to TAA.
3.4.2 Organic versus non-organic (full sample)
FBI/farm (£)
Thousands
Figure 10 Average FBI/farm for organic and non-organic farms by farm type
2014/15
90
80
70
60
50
40
30
20
10
0
Cropping
Horticulture
Organic
Dairy
LFA Grazing
Livestock
Lowland
Grazing
Mixed
Non-organic
The organic LFA grazing farm group remains (as in 2013/14) the only farm group
able to generate a higher FBI/farm than the non-organic LFA grazing farms (Figure
10). In all other farm type groups the non-organic farms appear to generate a higher
FBI/farm than their organic counterparts, however, this is not always a significant
difference – see Table 11 below. While the FBI/farm figure is best able to inform
profitability at a national level, the per hectare figure is often seen as more appropriate
at farm level. Figure 11 presents the FBI/ha data by farm type group. As at the farm
level above, the organic LFA grazing group generates a higher FBI/ha than the nonorganic LFA grazing farms. The apparently higher FBI/ha for the cropping and
horticulture farm groups is not actually statistically significant (see Table 12).
14
Organic Farming in England 2014/15
Figure 11 Average FBI/ha (TAA) for organic and non-organic farms by farm
type 2014/15
600
FBI/ha TAA (£)
500
400
300
200
100
0
Cropping Horticulture
Dairy
(/10)
Organic
Non-organic
LFA Grazing
Livestock
Lowland
Grazing
Mixed
Table 10 shows the relationship by farm type, between FBI/farm and FBI/ha on both a
Utilisable Agricultural Area and Total Adjusted Area basis. See section 2.4 above,
Farm size by various measures, for the background to these two measures of area.
Table 10 Average FBI for organic and non-organic farms by farm type 2014/15
2014/15 (full
sample)
Organic
Non-organic
Organic
Horticulture
Non-organic
Organic
Dairy
Non-organic
Organic
LFA Grazing
Non-organic
Organic
Lowland Grazing
Non-organic
Organic
Mixed
Non-organic
Cropping
Number Number
of farms of farms
(sample) (weighted)
22
508
10
176
32
264
20
102
40
249
23
178
461
19122
350
2945
254
6275
217
6475
936
11479
297
5963
FBI –
£/farm
FBI –
£/ha
(UAA)
FBI –
£/ha
(TAA)
28854
47309
20290
32826
74741
84139
43467
14186
14452
18799
14330
21957
237
231
1705
1197
546
567
130
106
155
190
118
159
235
230
1705
1194
419
542
211
123
158
184
118
155
15
Organic Farming in England 2014/15
Table 11 Statistical differences in average FBI/farm between organic and nonorganic farms 2014/15
FBI/Farm (£)
2014/15
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
Organic
Non-organic
Mean
Mean
28854
47309
20290
32826
74741
84139
43467
14186
14452
18799
14330
21957
Difference
-18454
-12537
-9398
29281
-4347
-7627
Significance
**
**
**
**
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
Note: please see notes regarding sample sizes and group composition on page 7
Table 12 Statistical differences in average FBI/ha between organic and nonorganic farms 2014/15
FBI/ha TAA (£)
2014/15
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
Organic
Non-organic
Mean
Mean
235
230
1705
1194
505
542
211
123
158
184
118
155
Difference
5
511
-38
88
-25
-37
Significance
**
*
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
Figure 10 shows FBI/farm for the various farm type groups with Table 11 showing
where this difference is actually significant. As mentioned above not all of the
apparent differences in FBI are significant; there being no statistical difference in the
FBI/farm between organic and non-organic farms for both the dairy and mixed farm
groups. Figure 11 shows FBI/ha for the farm type groups with Table 12 showing
where this difference is significant. It is only the LFA and lowland grazing groups
where the difference is actually significant, and even then only moderate for the LFA
grazing group and slight for the lowland grazing group.
16
Organic Farming in England 2014/15
3.5 Net Farm Income
Thousands
Figure 12 Average NFI/farm for organic and non-organic farms by farm type
2014/15
80
70
60
50
NFI/farm (£)
40
30
20
10
0
Cropping
Horticulture
Dairy
Organic
LFA Grazing
Livestock
Non-organic
Lowland
Grazing
Mixed
As discussed in section 3.1 above, Net Farm Income (NFI) remains the preferred
measure of farm income with which to compare farms on an equal basis with
differing levels of land ownership. NFI, while including an imputed rental charge for
owned land, excludes land ownership costs and interest payments (see APPENDIX 6
– DEFINITION OF TERMS for a full definition). The differences in farm income
between organic and non-organic farms are broadly similar when measured by either
NFI or FBI, in direction at least, if not in absolute terms. And as was the case with
FBI/farm, it is only the LFA grazing group where the organic farms realise a higher
NFI/farm than the non-organic farms. The statistical differences are however only
significant for two of the farm types; horticulture and LFA grazing (see Table 13).
Table 13 Differences in NFI/farm between organic and non-organic farms by
farm type 2014/15
NFI/Farm (£)
2014/15
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
Organic
Non-organic
Mean
Mean
18378
26747
9212
32794
64863
69253
34154
5987
7162
7602
3024
7750
Difference
-8369
-23582
-4389
28166
-440
-4726
Significance
***
**
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
At the farm level the per hectare measure of income remains a more relevant
benchmark figure in that it removes (arguably not completely) the impact of farm size
on farm income levels. Figure 13 shows the differences in NFI/ha by farm type (with
the horticulture group results reduced by a factor of ten to facilitate presentation).
17
Organic Farming in England 2014/15
Interestingly several of the apparent income differences at the farm level appear to be
reversed at the per hectare level – however it is only the LFA grazing group that
actually shows a statistically significant difference in income, see Table 14.
NFI/ha TAA (£)
Figure 13 Average NFI/ha for organic and non-organic farms by farm type
2014/15
500
450
400
350
300
250
200
150
100
50
0
Cropping
Horticulture
(/10)
Organic
Dairy
LFA Grazing
Livestock
Lowland
Grazing
Mixed
Non-organic
Table 14 Differences in average NFI/ha between organic and non-organic farms
by farm type 2014/15
NFI/ha TAA (£)
2014/15
Cropping
Horticulture
Dairy
LFA Grazing
Lowland Grazing
Mixed
Organic
Non-organic
Mean
Mean
150
130
774
1193
438
446
166
52
79
74
25
55
Difference
20
-419
-9
114
4
-30
Significance
**
-
(- not significant, * significant at 10% (slight), ** at 5% (moderate), *** at 1% (strong))
18
Organic Farming in England 2014/15
4
Detailed costs and returns by farm type
The following section provides a detailed breakdown by farm type on a per farm and
per hectare basis, of revenue by cost centre and farm income measures for: an
identical sample of organic farms year-on-year (2013/14 and 2014/15) and the full
sample (2014/15) on an organic versus non-organic basis. This commentary focuses
on the per hectare results, which, as discussed above, minimises the effect of farm
size on the results.
4.1 Cropping
The cropping group includes farms from both the cereal and general cropping farm
types – there are insufficient farms in these groups to allow separate presentation.
Organic cropping farms year-on-year
Farm Business Output per hectare fell by 3% to £1270/ha. Agricultural output, which
accounts for 63% of farm output, fell by 3%. The crop component, contributing 96%
of agricultural output, also fell by 3%, and the livestock component by 17%. Agrienvironment scheme revenues (10% of total) increased by 6%, offsetting a 6% fall in
Single payment revenue (15% of total). Diversification and miscellaneous revenues,
which provide 12% of total revenue, remained constant (Table 15).
Costs for organic cropping farms also fell, but only by 1% to generate a Farm
Business Income of £201/ha in 2014/15, a 10% reduction on 2013/14. Net Farm
Income (NFI) also fell (by 13%) to £149/ha, which after having deducted an imputed
figure for farmer and spouse manual labour fails to generate a positive figure for
Management and Investment Income (MII) – effectively the return on the capital
invested in the business.
Cropping farms, organic and non-organic
Table 16 details the differences between the full sample of organic and non-organic
cropping farms for the 2014 crop year. The average organic cropping farm size is
122.7ha compared to 205.4ha for a non-organic cropping farm. Organic cropping
farms generate only 46% of the farm business output of a non-organic farm at the
farm level, but at the per hectare level the difference is much closer with organic
cropping farms generating £1234/ha – nearly 80% of the output/ha of the non-organic
farms. The agricultural output per hectare of organic cropping farms is some 64% of
the non-organics (and that remains about the same for both livestock and crop
outputs) but organic farms are able to earn over three times the revenue per hectare
from agri-environment schemes as their non-organic counterparts. The non-organic
cropping farms generate considerably more revenue from diversification and
miscellaneous sources. Revenues are broadly equal from the Single payment.
Organic cropping farms incurred total costs of £1,003/ha, 27% less than the nonorganic farms with fertiliser and crop protection costs almost completely accounting
for this difference. Overhead costs were slightly lower for organic cropping farms at
£824/ha (versus £890/ha for the non-organics). The resultant FBI of £235/ha for
organic cropping farms is not significantly greater than the figure of £230/ha for the
non-organic farms. The corresponding NFI of £150/ha for organic cropping farms is
also not significantly higher than the £130/ha of the non-organics (see Table 14)
Further detailed commentary on organic cropping farms is given in APPENDIX 1 –
ORGANIC CROPPING.
19
Organic Farming in England 2014/15
Table 15 Cropping farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average cropping farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
16
270
113,916
148.9
11.9
£/farm
122,664
5,151
117,514
17,346
23,609
30,412
194,032
1,950
928
245
777
28,595
15,447
3,183
1,296
8,669
17,812
24,976
31,760
9,024
7,508
15,227
16,152
39,906
161,151
192
33,073
428
1,600
19,588
6,114
4,660
25,431
23,112
1,447
3,766
£/ha
824
35
789
117
159
204
1303
13
6
2
5
192
104
21
9
58
120
168
213
61
50
102
108
268
1082
222
3
11
132
41
31
171
155
10
25
63%
4%
96%
9%
12%
16%
100%
1%
48%
13%
40%
18%
54%
11%
5%
30%
11%
15%
20%
28%
24%
48%
10%
25%
100%
16
311
108,376
143.0
11.2
£/farm
113,861
4,117
109,743
17,698
22,577
27,515
181,651
1,165
258
116
791
28,922
15,293
3,532
1,161
8,936
17,858
21,375
28,495
7,871
6,608
14,015
15,834
40,088
153,736
826
28,741
555
1,121
20,339
7,190
5,149
21,307
22,987
1,085
-595
£/ha
796
29
767
124
158
192
1270
8
2
1
6
202
107
25
8
62
125
149
199
55
46
98
111
280
1,075
201
4
8
142
50
36
149
161
8
-4
20
63%
4%
96%
10%
12%
15%
100%
1%
22%
10%
68%
19%
53%
12%
4%
31%
12%
14%
19%
28%
23%
49%
10%
26%
100%
Organic Farming in England 2014/15
Table 16 Cropping farms, organic and non-organic, full sample 2014/15
Non-organic
2014/15
The average cropping farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
508
19,122
250,953
205.4
14.7
£/farm
231,658
9,307
222,351
8,440
48,021
38,511
326,630
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
5,177
2,841
587
1,748
92,702
16,715
32,845
32,550
10,592
20,032
28,553
62,033
16,076
15,377
30,580
19,238
52,901
280,636
1,314
47,309
5,605
5,335
32,532
3,287
8,954
26,747
17,475
208
9,480
£/ha
1,128
45
1,082
41
234
187
1,590
25
14
3
9
451
81
160
158
52
98
139
302
78
75
149
94
258
1,366
230
27
26
158
16
44
130
85
1
46
Organic
2014/15
71%
4%
96%
3%
15%
12%
100%
2%
55%
11%
34%
33%
18%
35%
35%
11%
7%
10%
22%
26%
25%
49%
7%
19%
100%
22
461
94,267
122.7
9.3
£/farm
88,557
2,993
85,564
15,432
23,615
23,829
151,432
857
231
84
543
21,154
11,638
2,596
783
6,137
13,107
16,305
24,737
6,593
5,918
12,225
12,870
34,113
123,144
566
28,854
1,708
920
18,938
4,884
4,366
18,378
20,551
731
-1,441
£/ha
722
24
697
126
192
194
1,234
7
2
1
4
172
95
21
6
50
107
133
202
54
48
100
105
278
1,003
235
14
7
154
40
36
150
167
6
-12
21
58%
3%
97%
10%
16%
16%
100%
1%
27%
10%
63%
17%
55%
12%
4%
29%
11%
13%
20%
27%
24%
49%
10%
28%
100%
Organic Farming in England 2014/15
4.2 Horticulture
As with previous years the sample of organic horticulture farms remains low with
only 10 farms available. These same 10 farms were also present in the 2013/14
dataset so a year on year comparison is possible. However extreme care must be taken
when making conclusions about the horticulture sample due to the diverse nature of
enterprises contained within the sample, see 2.3 Data sample: Limitations.
Organic horticulture farms year-on-year
Table 17 shows how Farm Business Output (FBO) for organic horticulture farms
increased by 44% to £6,588/ha in 2014/15. Agriculture output, which is almost
exclusively crop output, increased by 50% to £4,614/ha. Diversification and
miscellaneous income, which accounts for 26% of farm output also increased, by
30%, to £1702/ha. Agri-environment payments and the Single farm payment
combined only account for 4% of total farm output.
Total costs for organic horticulture farms increased by 38% to £4,880/ha with the
major contributors being a 64% increase in paid labour costs (to £1,173ha, 24% of
total costs) and other overhead costs, which increased by 38% (to £1,537/ha, 31% of
total costs). Paid rents saw a marked increase of 72% to £468/ha (10% of total costs)
and crop variable costs, due almost entirely to other crop costs, rose by 20% to
£815/ha.
The overall effect on Farm Business Income (FBI) was a resultant 60% increase to
£1,705/ha. After allowing for the appropriate adjustments Net Farm Income (NFI)
showed a 134% increase to £774/ha. However, this figure fails to cover an imputed
wage for farmer and spouse manual labour of £2,924/ha, thus returning a negative
Management and Investment Income (MII) of £-2,149/ha.
Horticulture farms, organic and non-organic
The average organic horticulture farm at 11.9ha is less than half the size of its nonorganic counterpart (of 27.5ha). When measured on a Standard Output (SO) (see
APPENDIX 6 – DEFINITION OF TERMS) basis, the average non-organic
horticulture farm is five times the size of an organic unit (Table 18). Organic
horticulture farms generate, on average, an FBO of £6,588/ha, about half of that of a
non-organic farm, of £13,754/ha. As might be expected this is mainly due to the
difference in output from agriculture (almost exclusively crop output) where organic
farms typically receive £4,614/ha and the non-organics achieve £12,225/ha.
Diversification revenues appear to be slightly more important to the organic group at
£1,702/ha in contrast to £1,295/ha for the non-organic group.
Total costs for organic horticulture farms, of £4,880/ha, were about one third of that
of the non-organic farms, of £12,579/ha. Variable costs make up 17% of total costs on
organic farms (39% on non-organic farms). Paid labour accounts for 24% of total
costs on organic horticultural farms, machinery 16%, and rents 10%.
The resultant FBI is £1,705/ha for the organic farms and £1,194 for the non-organics
(this difference is not statistically significant). However, after the deduction of,
mainly unpaid manual labour excluding farmer and spouse, and the other adjustments
to calculate NFI this apparent difference is reversed with the organic farms realising
an NFI of £774/ha and the non-organics £1,193/ha. After an imputed wage for farmer
and spouse manual labour is deducted from NFI the resultant MII is a negative £2,149/ha for organic horticultural farms, and £402/ha for the non-organic farms.
22
Organic Farming in England 2014/15
Table 17 Horticulture farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average horticulture farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
10
247
61,086
10.8
0.8
£/farm
33,064
492
32,573
390
14,090
1,788
49,332
157
101
29
27
7,329
3,628
441
0
3,260
868
7,708
6,973
2,151
2,324
2,497
2,925
12,047
38,007
115
11,440
6,363
142
3,274
0
1,608
3,552
28,980
0
-25,428
£/ha
3075
46
3029
36
1310
166
4587
15
9
3
3
681
337
41
0
303
81
717
648
200
216
232
272
1120
3534
1064
592
13
304
0
149
330
2695
0
-2364
67%
1%
99%
1%
29%
4%
100%
0%
64%
18%
17%
19%
50%
6%
0%
44%
2%
20%
18%
31%
33%
36%
8%
32%
100%
10
350
60,409
11.9
0.8
£/farm
54,893
178
54,715
1,344
20,245
1,904
78,385
238
40
153
45
9,697
3,941
715
2
5,039
931
13,952
9,392
2,153
4,766
2,473
5,566
18,283
58,059
-37
20,290
10,303
153
2,777
0
1,848
9,212
34,786
0
-25,574
£/ha
4614
15
4599
113
1702
160
6588
20
3
13
4
815
331
60
0
423
78
1,173
789
181
401
208
468
1,537
4,880
1,705
866
13
233
0
155
774
2,924
0
-2,149
23
70%
0%
100%
2%
26%
2%
100%
0%
17%
64%
19%
17%
41%
7%
0%
52%
2%
24%
16%
23%
51%
26%
10%
31%
100%
Organic Farming in England 2014/15
Table 18 Horticulture farms, organic and non-organic, full sample 2014/15
Non-organic
2014/15
The average horticulture farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
176
2,945
328,256
27.5
1.7
£/farm
336,033
969
335,065
2,116
35,608
4,289
378,046
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
694
418
60
216
135,710
52,179
11,216
9,735
62,580
6,549
113,752
27,817
6,838
9,278
11,701
6,963
54,274
345,760
540
32,826
5,695
3,669
9,010
6,183
4,820
32,794
22,433
697
11,058
£/ha
12,225
89%
0%
35
100%
12,190
77
1%
1,295
9%
156
1%
13,754 100%
25
0%
60%
15
9%
2
31%
8
4,937
39%
38%
1,898
8%
408
7%
354
46%
2,277
238
2%
4,138
33%
1,012
8%
25%
249
33%
338
42%
426
253
2%
1,975
16%
12,579 100%
1,194
207
133
328
225
175
1,193
816
25
402
Organic
2014/15
10
350
60,409
11.9
0.8
£/farm
54,893
178
54,715
1,344
20,245
1,904
78,385
238
40
153
45
9,697
3,941
715
2
5,039
931
13,952
9,392
2,153
4,766
2,473
5,566
18,283
58,059
-37
20,290
10,303
153
2,777
0
1,848
9,212
34,786
0
-25,574
£/ha
4,614
15
4,599
113
1,702
160
6,588
20
3
13
4
815
331
60
0
423
78
1,173
789
181
401
208
468
1,537
4,880
1,705
866
13
233
0
155
774
2,924
0
-2,149
24
70%
0%
100%
2%
26%
2%
100%
0%
17%
64%
19%
17%
41%
7%
0%
52%
2%
24%
16%
23%
51%
26%
10%
31%
100%
Organic Farming in England 2014/15
4.3 Dairy
Organic dairy farms year-on-year
Organic dairy farms saw an 8% increase in Farm Business Income (FBI) to £505/ha
from 2013/14 to 2014/15. This converts to a Net Farm Income (NFI) figure of
£438/ha, which, having deducted the imputed figure for farmer and spouse manual
labour, gives a Management and Investment Income (MII) of £237/ha.
Total Farm Business Output, of £2,574/ha in 2014/15, was virtually unchanged on
2013/14. Agricultural production, which contributes 87% of this total, was also
unchanged but within this livestock output was down (by 2%) with the crop
component increasing to make up the difference. Agri-environment payments had
increased slightly to £74/ha. Diversification output was also up, by 9% to £102/ha,
but the Single payment contribution had dropped by an equal amount to £160/ha.
Total costs were down by 2% to £2,074/ha. Livestock variable costs, which account
for 43% of total costs, were down by 5%. Paid labour and machinery, 13% and 14%
of total costs respectively, were both down, but paid rents, 5% of total, were up by
10%. Other overhead costs, 18% of total costs, were up slightly by 3%.
Dairy farms, organic and non-organic
The average organic dairy farm has a farm area of 148.1 hectares and carries 178.3
grazing livestock units (GLU) – slightly smaller than the average for non-organic
dairy farms which has 155.1 hectares and 261.6 GLU. Stocking rates are 1.2 GLU/ha
for organic dairy farms and 1.7 GLU/ha for the non-organics.
The Farm Business Income of £505/ha for organic dairy farms was not significantly
different from the £542/ha figure for the non-organic farms. This FBI figure translates
to an NFI of £438/ha, which again, is not significantly lower than the figure of
£446/ha for the non-organic dairy farms.
The Farm Business Output, of £2,547/ha, for organic dairy farms is considerably
lower than the £3,587/ha for non-organic farms. Where 87% of this total is derived
from agricultural production on organic farms, this figure is 91% on non-organic
farms. It follows therefore that organic dairy farms derive a slightly larger fraction of
their output per hectare from Agri-environment schemes, Diversification activities
and the Single Payment Scheme; in each of these categories the organic farms receive
slightly less per hectare than the non-organic dairy farms.
The total costs on organic dairy farms (of £2,074/ha) are about £1,000/ha lower than
on non-organic farms. The proportional distribution of costs among the cost
components is however very similar. The livestock variable costs, which make up
nearly half of the total costs for both groups of farms, have a very similar distribution
among the sub-categories.
Further detailed commentary on organic dairy farms is given in APPENDIX 4 –
ORGANIC DAIRY PRODUCTION
25
Organic Farming in England 2014/15
Table 19 Dairy farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average dairy farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
32
225
375,391
147.0
180.9
£/farm
328,935
323,442
5,493
9,425
13,743
25,967
378,070
137,157
96,724
8,176
32,257
7,060
4,655
826
21
1,557
16,570
40,198
42,901
10,002
13,188
19,711
13,911
52,346
310,143
941
68,869
5,142
6,505
22,491
1,640
9,696
59,076
28,558
444
30,962
£/ha
2238
2200
37
64
93
177
2572
933
658
56
219
48
32
6
0
11
113
273
292
68
90
134
95
356
2110
468
35
44
153
11
66
402
194
3
211
87%
98%
2%
2%
4%
7%
100%
44%
71%
6%
24%
2%
66%
12%
0%
22%
5%
13%
14%
23%
31%
46%
4%
17%
100%
32
264
379,330
148.1
178.3
£/farm
331,462
320,993
10,469
10,978
15,119
23,737
381,296
131,117
91,517
7,801
31,799
6,720
4,124
1,024
23
1,550
18,715
39,570
41,541
8,838
12,712
19,991
15,422
54,119
307,203
649
74,741
5,440
6,262
23,262
2,162
10,401
64,863
30,263
453
35,053
£/ha
2238
2167
71
74
102
160
2574
885
618
53
215
45
28
7
0
10
126
267
280
60
86
135
104
365
2,074
505
37
42
157
15
70
438
204
3
237
26
87%
97%
3%
3%
4%
6%
100%
43%
70%
6%
24%
2%
61%
15%
0%
23%
6%
13%
14%
21%
31%
48%
5%
18%
100%
Organic Farming in England 2014/15
Table 20 Dairy farms, organic and non-organic, full sample 2014/15
Non-organic
2014/15
The average dairy farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
254
6,275
550,951
155.1
261.6
£/farm
507,624
478,011
29,612
4,864
18,916
25,094
556,498
209,019
153,571
16,061
39,387
35,954
5,713
20,236
6,110
3,895
28,188
45,006
63,353
14,060
19,322
29,971
18,707
73,012
473,239
881
84,139
14,268
11,373
28,301
884
15,426
69,253
30,464
75
38,863
£/ha
3,272
3,081
191
31
122
162
3,587
1,347
990
104
254
232
37
130
39
25
182
290
408
91
125
193
121
471
3,051
542
92
73
182
6
99
446
196
0
251
Organic
2014/15
91%
94%
6%
1%
3%
5%
100%
44%
73%
8%
19%
8%
16%
56%
17%
11%
6%
10%
13%
22%
30%
47%
4%
15%
100%
32
264
379,330
148.1
178.3
£/farm
331,462
320,993
10,469
10,978
15,119
23,737
381,296
131,117
91,517
7,801
31,799
6,720
4,124
1,024
23
1,550
18,715
39,570
41,541
8,838
12,712
19,991
15,422
54,119
307,203
649
74,741
5,440
6,262
23,262
2,162
10,401
64,863
30,263
453
35,053
£/ha
2,238
2,167
71
74
102
160
2,574
885
618
53
215
45
28
7
0
10
126
267
280
60
86
135
104
365
2,074
505
37
42
157
15
70
438
204
3
237
27
87%
97%
3%
3%
4%
6%
100%
43%
70%
6%
24%
2%
61%
15%
0%
23%
6%
13%
14%
21%
31%
48%
5%
18%
100%
Organic Farming in England 2014/15
4.4 LFA grazing
Organic LFA grazing farms year-on-year
The profitability of LFA grazing farms increased between 2013/14 and 2014/15.
When measured by Farm Business Income (FBI) the FBI per hectare increased by
15% to £211/ha. This increase in FBI translated into a 12% increase in Net Farm
Income, to £166/ha, and a 40% increase in Management and Investment Income
(MII) to £80/ha (Table 21). These increases in profit were due to a 5% increase in
Farm Business Output, to £910/ha, and despite a 2% increase in total costs (to
£700/ha). The increase in total farm output was attributable to: a 10% increase per
hectare in output from Agriculture, a 4% increase in Agri-environment incomes, a
49% increase in Diversification incomes and despite a 12% reduction in revenue from
the Single payment scheme.
Overall costs increased by 2% per hectare. This included a 5% decrease in livestock
variable costs (23% of total costs) which was more than offset by increases in; paid
labour (by 4%, 12% of total costs) machinery (up by 11%, 21% of total costs) paid
rents (13% increase, 9% of total costs) and other overheads (increased by 4%, 23% of
total costs).
LFA grazing farms, organic and non-organic
The average organic LFA grazing farm is 205.9ha and carries 141.2 grazing livestock
units (GLU) – this is rather larger than the average non-organic LFA grazing farm
which is 115.3ha and carries 85.2 GLU.
Organic LFA grazing farms made a profit of £211/ha Farm Business Income (FBI) in
2014/15 whereas the non-organic farms only managed £123/ha (Table 22). This gap
widened further when these figures are adjusted to Net farm Income (NFI) where the
organic farms saw a profit of £166/ha NFI and the non-organic farms £52/ha NFI. The
difference increased again at the Management and Investment Income level where the
organic farms achieved £80/ha but the non-organics returned a negative £-132/ha.
Farm Business Output for the organic LFA grazing farms averaged £910/ha against
£823/ha for the non-organics. While the organic LFA farms only achieved 98% of the
agricultural output of the non-organic farms (at £511/ha) they more than made up for
this small difference with greater revenues from Agri-environment payments
(£171/ha) and the Single Payment Scheme. Organic farms earned slightly less from
Diversification and miscellaneous activities than the non-organic farms.
Total costs for organic and non-organic LFA grazing farms were almost identical at
£700/ha and £701/ha respectively. Organic farms had noticeably lower livestock
variable costs (at £164/ha versus £225/ha) and slightly lower machinery costs of
£145/ha against £148/ha. In all other cost items the organic farms had higher costs per
hectare than the non-organics, with contract (£51/ha for organics and £30/ha for the
non-organics) and paid labour (£85ha for organics, £38/ha for the non-organics) being
the most obvious.
Further detailed commentary on organic LFA grazing farms is given in APPENDIX 3
– ORGANIC LFA CATTLE AND SHEEP
28
Organic Farming in England 2014/15
Table 21 LFA grazing farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average LFA grazing farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
20
117
116,942
198.8
135.0
£/farm
92,127
84,229
7,898
32,678
5,766
41,345
171,916
34,474
17,816
5,685
10,972
6,762
2,614
2,652
384
1,112
11,364
16,270
25,818
7,540
5,556
12,721
10,765
30,436
135,889
532
36,558
3,224
1,705
15,388
2,733
7,067
29,451
18,138
46
11,359
£/ha
463
424
40
164
29
208
865
173
90
29
55
34
13
13
2
6
57
82
130
38
28
64
54
153
684
184
16
9
77
14
36
148
91
0
57
54%
91%
9%
19%
3%
24%
100%
25%
52%
16%
32%
5%
39%
39%
6%
16%
8%
12%
19%
29%
22%
49%
8%
22%
100%
20
102
127,296
205.9
141.2
£/farm
105,323
98,061
7,262
35,313
8,885
37,871
187,392
33,871
15,734
6,921
11,215
7,036
1,843
3,463
365
1,366
10,529
17,556
29,763
6,682
8,059
15,022
12,642
32,755
144,151
226
43,467
3,813
3,071
17,118
2,181
6,365
34,154
17,739
70
16,485
£/ha
511
476
35
171
43
184
910
164
76
34
54
34
9
17
2
7
51
85
145
32
39
73
61
159
700
211
19
15
83
11
31
166
86
0
80
29
56%
93%
7%
19%
5%
20%
100%
23%
46%
20%
33%
5%
26%
49%
5%
19%
7%
12%
21%
22%
27%
50%
9%
23%
100%
Organic Farming in England 2014/15
Table 22 LFA grazing farms, organic and non-organic, full sample 2014/15
Non-organic
2014/15
The average LFA grazing farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
217
6,475
76,813
115.3
85.2
£/farm
60,414
57,561
2,853
10,792
5,830
17,793
94,829
25,913
15,424
3,506
6,984
5,891
322
4,567
385
618
3,441
4,380
17,099
4,480
3,869
8,750
6,235
17,893
80,853
210
14,186
4,110
1,939
8,973
99
2,846
5,987
21,227
28
-15,212
£/ha
524
499
25
94
51
154
823
225
134
30
61
51
3
40
3
5
30
38
148
39
34
76
54
155
701
123
36
17
78
1
25
52
184
0
-132
Organic
2014/15
64%
95%
5%
11%
6%
19%
100%
32%
60%
14%
27%
7%
5%
78%
7%
10%
4%
5%
21%
26%
23%
51%
8%
22%
100%
20
102
127,296
205.9
141.2
£/farm
105,323
98,061
7,262
35,313
8,885
37,871
187,392
£/ha
511
476
35
171
43
184
910
33,871
15,734
6,921
11,215
7,036
1,843
3,463
365
1,366
10,529
17,556
29,763
6,682
8,059
15,022
12,642
32,755
144,151
226
43,467
3,813
3,071
17,118
2,181
6,365
34,154
17,739
70
16,485
164
76
34
54
34
9
17
2
7
51
85
145
32
39
73
61
159
700
211
19
15
83
11
31
166
86
0
80
30
56%
93%
7%
19%
5%
20%
100%
23%
46%
20%
33%
5%
26%
49%
5%
19%
7%
12%
21%
22%
27%
50%
9%
23%
100%
Organic Farming in England 2014/15
4.5 Lowland grazing farms
Organic lowland grazing farms year-on-year
The average organic lowland grazing farm saw Farm Business Income rise by 45% to
£134/ha in 2014/15. This corresponds to a Net farm Income of £61/ha, a rise of 53%
from the 2013/14 figures. However, once an imputed figure for farmer and spouse
manual labour is deducted, the resultant Management and Investment Income is a
negative £148/ha (Table 23).
The increase in profitability was attributable to a 5% increase in overall Farm
Business Output (to £964/ha) – total costs being almost unchanged between years, at
£835/ha in 2014/15. Within this gross output figure, output from agriculture increased
by 8% to £472/ha, and the livestock component, which accounts for 86% of this
figure, increased by 7% to £408/ha. Crop output also increased slightly (by 21%).
Agri-environment payments and Single Payment revenues fell by 10% and 6% per
hectare respectively. Revenues from Diversification increased by 21% to £184/ha.
Within the total costs figure of £835/ha; livestock and crop variable costs were 4%
and 12% lower per hectare than in 2013/14, contract costs (6% of total) was up by
13% and paid labour (6% of total) was down by 11%. Machinery costs were down
1% at £234/ha. Paid rents, which account for 6% of total costs, were down by 12% to
£54/ha. Other costs, which account for 36% of total costs, were up by 8% to £298/ha.
Lowland grazing farms, organic and non-organic
The average organic lowland grazing farms is about 10ha smaller than the average
non-organic farm, has about 20 fewer livestock units and has stocking rate of
0.79GLU/ha, compared to 0.89GLU/ha for the non-organic equivalent (Table 24).
The average Farm Business Income of £158/ha for organic lowland grazing farms is
not significantly lower than the £184/ha figure for non-organic lowland grazing
farms. At the Net Farm Income level, where the profitability measures £79/ha for
organic farms and £74/ha for non-organics, this difference is also not statistically
significant.
Organic lowland grazing farms produce a total output of £973/ha compared to
£1,060/ha for the non-organic farms. Agri-environment schemes, Diversification and
Single payment sources collectively account for 52% of total output on the organic
farms (all greater on a per hectare basis than the equivalent sources on the nonorganic farms) leaving agriculture to generate the remaining 48% at £466/ha. On nonorganic lowland grazing farms agricultural output at £686/ha accounts for 65% of
total output.
The variable costs on organic lowland grazing farms account for 19% of total costs
(£152/ha) – this figure is 35% for the non-organics at £310/ha. Contract charges and
paid labour are slightly higher on non-organic farms (both £59/ha) than on the organic
farms (£54/ha and £48/ha respectively) but on both farm types accounting for
between 6% and 7% of total costs per hectare. Machinery costs at £219/ha (27% of
total) are higher than on the non-organics (£186/ha, 21% of total). Other (overhead)
costs account for 36% of total costs for organic farms (£293/ha) in comparison to the
figure of £220/ha (25% of total costs) for the non-organic lowland grazing farms.
Further detailed commentary on organic lowland grazing farms is given in
APPENDIX 2 – ORGANIC LOWLAND CATTLE AND SHEEP
31
Organic Farming in England 2014/15
Table 23 Lowland grazing farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average lowland grazing farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
33
745
67,400
99.0
74.1
£/farm
43,085
37,803
5,282
13,166
15,029
19,867
91,147
12,316
4,851
1,660
5,805
3,060
1,903
474
40
643
4,791
5,532
23,337
4,087
4,980
14,269
6,053
27,313
82,403
413
9,157
4,395
3,666
11,260
3,478
3,269
3,915
20,559
57
-16,587
£/ha
435
382
53
133
152
201
921
124
49
17
59
31
19
5
0
6
48
56
236
41
50
144
61
276
832
92
44
37
114
35
33
40
208
1
-168
47%
88%
12%
14%
16%
22%
100%
15%
39%
13%
47%
4%
62%
15%
1%
21%
6%
7%
28%
18%
21%
61%
7%
33%
100%
33
777
65,985
93.0
73.4
£/farm
43,901
37,927
5,974
11,127
17,085
17,592
89,704
11,061
4,152
1,592
5,317
2,518
1,462
274
42
739
4,992
4,644
21,749
3,478
4,949
13,322
5,013
27,749
77,726
499
12,478
4,197
3,623
13,522
3,660
3,597
5,640
19,498
78
-13,781
£/ha
472
408
64
120
184
189
964
119
45
17
57
27
16
3
0
8
54
50
234
37
53
143
54
298
835
134
45
39
145
39
39
61
210
1
-148
32
49%
86%
14%
12%
19%
20%
100%
14%
38%
14%
48%
3%
58%
11%
2%
29%
6%
6%
28%
16%
23%
61%
6%
36%
100%
Organic Farming in England 2014/15
Table 24 Lowland grazing farms, organic and non-organic, full sample 2014/15
Nonorganic
2014/15
The average lowland grazing farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
249
11,479
85,758
102.4
91.5
£/farm
70,304
58,893
11,411
5,290
16,858
16,146
108,598
23,558
13,211
2,844
7,503
8,172
1,141
5,017
1,129
885
6,033
5,997
19,036
4,856
4,847
9,332
4,928
22,559
90,283
483
18,799
4,416
2,727
13,223
20
3,696
7,602
22,017
21
-14,394
£/ha
686
65%
84%
575
16%
111
52
5%
165
16%
158
15%
1,060 100%
230
26%
56%
129
12%
28
32%
73
80
9%
14%
11
61%
49
14%
11
11%
9
59
7%
59
7%
186
21%
26%
47
25%
47
49%
91
48
5%
220
25%
881 100%
184
43
27
129
0
36
74
215
0
-141
Organic
2014/15
40
936
65,321
91.2
72.5
£/farm
42,511
36,775
5,737
13,667
15,678
16,867
88,723
11,224
4,372
1,666
5,185
2,659
1,536
329
42
751
4,887
4,384
19,992
3,376
4,610
12,007
4,858
26,730
74,734
463
14,452
3,973
3,327
13,591
3,379
3,568
7,162
20,362
64
-13,135
£/ha
466
48%
87%
403
13%
63
150
15%
172
18%
185
19%
973 100%
123
15%
39%
48
15%
18
46%
57
29
4%
58%
17
12%
4
2%
0
28%
8
54
7%
48
6%
219
27%
17%
37
23%
51
60%
132
53
7%
293
36%
820 100%
158
44
36
149
37
39
79
223
1
-144
33
Organic Farming in England 2014/15
4.6 Mixed farms
Organic mixed farms year-on-year
Organic mixed farms saw a 29% fall in Farm Business Income from £168/ha (in
2013/14) to £119/ha in 2014/15. This translated to an 80% fall in Net Farm Income to
£12/ha, and that in turn, having deducted an imputed figure for farmer and spouse
labour (of £237/ha in 2014/15) to a Management and Investment Income of -£224
(Table 25).
The fall in profitability was due to a 3% fall in output to £1314/ha for 2014/15, costs
being held constant (£1194/ha in 2014/15). Output from agriculture, which generates
60% of total output, was down by 4% to £793/ha; livestock and crop outputs being
reduced by 6% and 1% per hectare respectively. Revenues from agri-environment
schemes and the single payment were also reduced, by 6% and 7% respectively, but
income from diversification increased by 3% to £215/ha.
Total costs for organic mixed farms remained almost constant at £1,194/ha in
2014/15. Livestock variable costs, which account for 20% of total costs, increased by
1% to £238/ha, and crop variable costs, 8% of total at £98/ha in 2014/15 were down
14% on 2013/14. Contract costs were up 8% to £88/ha (7% of total) and paid labour,
unchanged at £149/ha (12% of total). Machinery costs, which account for 22% of
total costs, were up 5% to £262/ha in 2014/15. Other (overhead) costs (25% of total
costs) were down 1% at £302/ha.
Mixed farms, organic and non-organic
The average size of an organic mixed farm is 121.3ha and it carries 61.4 grazing
livestock units (GLU) this making it about 20 ha smaller and with about 18 fewer
GLU than the average non-organic mixed farm (Table 26).
In 2014/15 the average organic mixed farm realised a Farm Business Income of
£118/ha against a figure of £155/ha for the non-organic mixed farms, there is however
no significant statistical difference between these two figures. There is also no
significant difference between organic and non-organic mixed farms at the Net Farm
Income level (£25/ha organics and £55/ha non-organics). Having deducted an
imputed figure for farmer and spouse manual labour the resultant Management and
Investment Income is negative for both groups; -£193 for organics and -£107 for the
non-organics.
Farm Business Output for the average organic mixed farm was £1,290, about 80% of
that generated by the average non-organic mixed farm. The output from agriculture
was lower on the organic farms, 58% of total output at £746/ha, than on the nonorganics, at 75% of total at £1,198/ha. In all other income categories: Agrienvironment, Diversification and Single payment, the organic farms derived more
income per hectare than the non-organic farms.
Total costs for organic mixed farms, at £1,172/ha, were 19% lower than for the nonorganic farms. Variable costs of £308/ha, which form 26% of total costs on organic
farms, are about 50% of those on the non-organic farms – where they constitute 42%
of total costs. Contract costs were broadly similar at £82/ha (organic) and £84/ha
(non-organic) and total machinery costs were similar at £251/ha on organic farms and
£281/ha on the non-organics. The average organic mixed farm spent £148/ha on paid
labour (13% of total costs) against £117/ha (8% of total) for non-organic farms. Other
(overhead) costs, at £329/ha, make up 28% of total costs against a figure of £274/ha
(19% of total costs) for the non-organic farms.
34
Organic Farming in England 2014/15
Table 25 Mixed farms, organic identical sample 2013/14 and 2014/15
Organic identical sample
2013/14
2014/15
The average mixed farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock component
Crop component
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
21
258
129,269
122.6
66.6
£/farm
101,438
63,512
37,926
15,804
25,461
24,127
166,830
28,928
18,389
1,677
8,862
14,055
8,946
1,947
507
2,655
9,969
18,228
30,515
6,390
7,312
16,814
7,629
37,226
146,551
259
20,538
3,907
3,345
20,316
516
7,351
7,527
27,129
117
-19,486
£/ha
828 61%
63%
518
37%
309
129
9%
208 15%
197 14%
1361 100%
236 20%
64%
150
6%
14
31%
72
115 10%
64%
73
14%
16
4%
4
19%
22
81
7%
149 12%
249 21%
21%
52
24%
60
55%
137
62
5%
304 25%
1196 100%
168
32
27
166
4
60
61
221
1
-159
21
280
121,762
114.9
63.7
£/farm
91,143
55,836
35,307
13,924
24,696
21,135
150,898
27,310
18,265
1,661
7,384
11,269
6,755
1,786
584
2,144
10,075
17,085
30,135
6,701
6,961
16,473
6,596
34,693
137,164
-30
13,705
2,231
3,796
21,140
435
6,814
1,379
27,271
109
-25,784
£/ha
793
486
307
121
215
184
1314
238
159
14
64
98
59
16
5
19
88
149
262
58
61
143
57
302
1,194
119
19
33
184
4
59
12
237
1
-224
35
60%
61%
39%
9%
16%
14%
100%
20%
67%
6%
27%
8%
60%
16%
5%
19%
7%
12%
22%
22%
23%
55%
5%
25%
100%
Organic Farming in England 2014/15
Table 26 Mixed farms, organic and non-organic, full sample 2014/15
Non-organic
2014/15
The average mixed farm
Number (unweighted)
Number (weighted)
Farm size (2010SO)
Farm area (adjusted ha)
Grazing livestock units
Agriculture:
Livestock
Crops
Agri-environment and other payments
Diversification & miscellaneous
Single Payment Scheme
Farm Business Output (a)
Livestock variable costs:
Feed
Vet & medicine
Other livestock costs
Crop variable costs:
Seed
Fertiliser
Crop protection
Other crop costs
Contract
Paid Labour
Machinery:
Fuel & oil
Repairs
Depreciation
Paid Rents
Other costs
Total Costs (b)
Profit/(loss) on sale of fixed assets
Farm Business Income (c=a-b)
Unpaid manual labour excl. farmer & spouse (d)
Interest payments (e)
Imputed rents (f)
Director's remuneration (g)
Ownership costs (h)
Net Farm Income (i=c-d+e-f+g+h)
Farmer & Spouse unpaid labour (j)
Paid managerial labour (k)
Management and Investment Income (l=i-j+k)
178
5,963
203,884
141.2
78.9
£/farm £/ha
169,191 1,198
92,147
653
77,044
546
7,872
56
23,142
164
24,793
176
224,998 1,593
48,894
346
34,549
245
3,523
25
10,821
77
37,074
263
6,196
44
15,780
112
11,746
83
3,352
24
11,841
84
16,529
117
39,705
281
9,948
70
10,379
73
19,378
137
11,659
83
38,763
274
204,466 1,448
1,424
21,957
155
6,993
50
4,656
33
19,456
138
1,234
9
6,352
45
7,750
55
22,885
162
70
0
-15,065 -107
Organic
2014/15
75%
54%
46%
3%
10%
11%
100%
24%
71%
7%
22%
18%
17%
43%
32%
9%
6%
8%
19%
25%
26%
49%
6%
19%
100%
23
297
121,172
121.3
61.4
£/farm £/ha
90,437
746
53,187
439
37,250
307
14,565
120
28,831
238
22,593
186
156,427 1,290
25,905
214
17,289
143
1,570
13
7,046
58
11,414
94
6,918
57
1,883
16
551
5
2,062
17
9,904
82
17,953
148
30,469
251
7,035
58
7,124
59
16,310
134
6,648
55
39,846
329
142,139 1,172
41
14,330
118
2,101
17
6,457
53
22,908
189
410
3
6,836
56
3,024
25
26,565
219
102
1
-23,439 -193
36
58%
59%
41%
9%
18%
14%
100%
18%
67%
6%
27%
8%
61%
17%
5%
18%
7%
13%
21%
23%
23%
54%
5%
28%
100%
Organic Farming in England 2014/15
5
Enterprise Gross Margins
5.1 Data sample
The distribution of available crop and livestock margin data by robust farm type and
size for organic farms are shown in Table 27 and Table 37.
All data presented in the following gross margin tables are weighted. All variable
costs to gross margin level are allocated through careful recording and in consultation
with participating farmers.
Table 28 and Table 38 show the sample size of organic crop and livestock enterprises
that have been analysed to gross margin level. Where sample numbers allow analyses
for a premium group (top third by weighted numbers by GM/ha or GM/head) are
presented.
There are 11 poultry enterprises recorded to gross margin level but they are a mix of:
layers (4) turkeys (3) broilers (2) and other poultry (2) and as such a gross margin of
this composite group would be of little value.
For livestock enterprises, forage areas and stocking rates are calculated on the basis of
the total adjusted forage area including commons; see APPENDIX 6 – DEFINITION
OF TERMS for more information. This is to allow the inclusion at the appropriate
rate of all sole occupier rough grazing and all grazed common land. Unused commons
are not included and the forage area figures are net of land let out and taken in. Stock
sent away on agistment are excluded from the stocking rate calculations and monies
spent on agistment is included in the figure for coarse fodder.
The dairy sample of 32 enterprises comprises of 3 LFA and 29 lowland dairy farms,
of these, 3 are retailers and 29 are wholesalers.
Crop enterprise gross margins are shown in Table 29 to Table 36.
Livestock enterprise gross margins are shown in Table 39 to Table 47.
Standard deviations are calculated on the per hectare or the per head figures.
37
Organic Farming in England 2014/15
5.2 Organic cropping enterprises
Table 27 Sample distribution of organic crop margin data (>10 records) by
robust farm type and size (2010SO)
Robust farm type
Small
(€2,500100,000)
Cereals
General cropping
Horticulture
Pigs
Poultry
Dairy
LFA Grazing
Lowland Grazing
Mixed
All
Medium
(€100,000250,000
12
7
5
0
0
0
5
14
8
51
Large
All
(>€250,000)
13
1
1
0
0
0
0
11
16
42
9
13
0
0
2
21
7
9
10
71
34
21
6
0
2
21
12
34
34
164
Table 28 Sample size for organic crop gross margin analysis
Enterprise
Winter wheat
Spring wheat
Spring barley
Winter oats
Spring oats
Spring beans
Field vegetables
Flowers etc
Sample
size
26
15
41
17
34
10
11
10
Sample
Weighted
Average
Sample
sample
crop area
size
size
(ha)
360
18.0
142
27.4
571
14.7
14
244
13.5
473
12.7
10
96
20.1
182
13.2
404
2.6
Premium
Weighted Average
sample
crop area
size
(ha)
188
16.7
160
5.9
38
Organic Farming in England 2014/15
Table 29 Organic winter wheat gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
26 crops
360 crops
18.0 hectares
per crop
per ha
std dev
72
228
4.0
1.2
33
15,465
1,052
0
16,517
per crop
1,847
555
201
276
36
2,916
13,601
861
59
0
920
per ha
103
31
11
15
2
162
757
274
65
0
84
39
22
27
7
96
260
Table 30 Organic spring wheat gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
15 crops
142 crops
27.4 hectares
per crop
per ha
std dev
91
257
3.3
1.1
28
22,058
2,004
0
24,063
per crop
2,505
973
45
846
109
4,478
19,584
804
73
0
877
per ha
91
35
2
31
4
163
714
303
65
0
54
39
5
33
8
59
313
39
Sample
Sample weighted
Average crop area
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop Yield and Output
2014 harvest year
Table 31 Organic spring barley gross margin
9,014
840
0
9,854
per crop
1,457
397
24
215
50
2,143
7,711
49
195
614
57
0
671
per ha
99
27
2
15
3
146
525
3.3
41 crops
571 crops
14.7 hectares
per crop
per ha
49
54
10
27
5
85
216
206
62
0
1.8
35
std dev
Top third
Top third weighted
Average crop area
12,943
1,269
0
14,212
per crop
1,471
438
32
333
49
2,323
11,889
69
219
777
76
0
853
per ha
88
26
2
20
3
139
714
4.1
14 crops
188 crops
16.7 hectares
per crop per ha
43
56
2
23
6
75
262
199
77
0
2.9
26
std dev
Organic Farming in England 2014/15
40
Organic Farming in England 2014/15
Table 32 Organic winter oats gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
17 crops
244 crops
13.5 hectares
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
per crop
59
194
per ha
4.4
std dev
1.1
32
11,064
1,136
0
12,199
per crop
1,460
264
59
301
11
2,095
10,104
820
84
0
904
per ha
108
20
4
22
1
155
749
266
124
0
42
55
16
27
8
82
258
Table 33 Organic spring beans gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
10 crops
96 crops
20.1 hectares
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
per crop
64
269
per ha
3.2
std dev
1.3
11
17,298
0
0
17,298
per crop
2,020
349
237
365
55
3,027
14,271
861
0
0
861
per ha
100
17
12
18
3
151
710
386
0
0
39
30
23
39
6
91
329
41
Sample
Sample weighted
Average crop area
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop Yield and Output
2014 harvest year
Table 34 Organic spring oats gross margin
8,442
981
0
9,423
per crop
1,081
294
14
423
31
1,842
7,581
39
231
667
77
0
744
per ha
85
23
1
33
2
145
599
3.1
34 crops
473 crops
12.7 hectares
per crop
per ha
54
55
2
31
4
75
220
235
266
0
1.0
31
std dev
Top third
Top third weighted
Average crop area
4,577
1,104
0
5,681
per crop
531
0
16
104
9
659
5,022
22
222
780
188
0
969
per ha
91
0
3
18
1
112
856
3.8
10 crops
160 crops
5.9 hectares
per crop
per ha
79
23
3
31
3
64
309
286
450
0
1.3
17
std dev
Organic Farming in England 2014/15
42
Organic Farming in England 2014/15
Table 35 Organic field vegetables gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
11 crops
182 crops
13.2 hectares
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
per crop
155
-
per ha
11.8
std dev
11.9
-
102,989
0
0
102,989
per crop
11,723
1,457
436
17,692
0
31,307
71,681
7,832
0
0
7,832
per ha
891
111
33
1,345
0
2,381
5,451
5,872
0
0
587
117
33
1,269
0
1,894
4,330
Table 36 Organic flowers etc. gross margin
2014 harvest year
Sample
Sample weighted
Average crop area
10 crops
404 crops
2.6 hectares
Crop Yield and Output
Yield (tonnes and tonnes/ha)
Price of crop sold (£/t)
Crop output
By product output
Area payment (Protein or energy crop supplements)
Total
Variable Costs
Seed
Fertiliser (incl. lime, purchased FYM, trace elements, etc.)
Crop protection materials
Other crop costs (including levies and commission)
Fuel for heating & drying
Total
Gross Margin
per crop
-
per ha
-
std dev
-
26,418
0
0
26,418
per crop
1,800
114
0
3,032
0
4,945
21,473
9,987
0
0
9,987
per ha
680
43
0
1,146
0
1,869
8,117
6,417
0
0
426
82
0
804
0
1,100
5,407
43
Organic Farming in England 2014/15
5.3 Organic livestock enterprises
Table 37 Sample distribution of organic livestock margin data (>10 records) by robust
farm type and size (2010SO)
Robust farm type
Cereals
General cropping
Horticulture
Pigs
Poultry
Dairy
LFA Grazing
Lowland Grazing
Mixed
All
Small
(€2,500-100,000)
1
2
4
0
0
2
15
45
13
82
Medium
Large
(€100,000-250,000) (>€250,000)
3
6
2
5
0
0
0
0
1
3
16
49
19
20
36
13
19
10
96
106
All
10
9
4
0
4
67
54
94
42
284
Table 38 Sample size for organic livestock gross margin analysis
Enterprise
Dairy cows
LFA suckler cows
Lowland suckler cows
Dairy followers
Fat cattle from suckler bred calves or stores
Store cattle from suckler bred calves or stores
Lowland sheep
LFA sheep (upland)
Sample
Premium
Sample Weighted Sample Weighted
size
sample size
size
sample size
32
260
11
88
18
111
62
1226
27
408
27
226
49
801
16
266
27
558
39
548
20
183
15
98
-
44
Organic Farming in England 2014/15
Table 39 Organic dairy cows gross margin – sample
Sample size
No farms in population
Production information
Average cow numbers
Enterprise grazing livestock units
Total milk produced (litres)
Total milk produced per cow (lt/cow)
Average price of milk sold (pence/lt)
Calves per cow (sold or transferred)
Herd replacement rate (%)
Adjusted forage area (including commons)
Stocking rate (cows per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
117
117.8
735,381
6,289
38.41
0.83
0.25
93.2
1.25
1.26
Enterprise Output
Total
Milk
Calves and other dairy related output
Less Herd Depreciation
Total Gross Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Average quota leasing in price (pence/lt)
Calf price (£/calf)
Cull cow price (£/cow)
Replacement heifer/cow price (£/head)
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excluding commons
32
260
per cow
per litre
(£)
282,454
11,722
23,959
270,217
(£)
2,416
100
205
2,311
(pence)
38.4
1.6
3.3
36.7
per adj for
ha
(£)
3,030
126
257
2,899
69,194
3,217
6,530
25,305
104,247
165,970
2,510
163,461
592
28
56
216
892
1,419
21
1,398
9.4
0.4
0.9
3.4
14.2
22.6
0.3
22.2
742
35
70
271
1,118
1,781
27
1,754
na
121
602
1,381
5
14
0
7
27
89.5
45
Organic Farming in England 2014/15
Table 40 Organic dairy cows gross margin – premium
Premium sample size
No farms in population
Production information
Average cow numbers
Enterprise grazing livestock units
Total milk produced (litres)
Total milk produced per cow (lt/cow)
Average price of milk sold (pence/lt)
Calves per cow (sold or transferred)
Herd replacement rate (%)
Adjusted forage area (including commons)
Stocking rate (cows per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
Enterprise Output
Milk
Calves and other dairy related output
Less Herd Depreciation
Total Gross Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Average quota leasing in price (pence/lt)
Calf price (£/calf)
Cull cow price (£/cow)
Replacement heifer/cow price (£/head)
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excluding commons
11
88
143
144.2
1,087,752
7,585
39.33
0.88
0.24
99.9
1.44
1.44
(£)
427,837
13,973
32,516
409,294
(£)
2,983
97
227
2,853
per
litre
(pence)
39.3
1.3
3.0
37.6
112,417
2,871
10,453
34,707
160,447
248,846
3,667
245,179
784
20
73
242
1,119
1,734
26
1,708
10.3
0.3
1.0
3.2
14.7
22.9
0.3
22.5
Total
per cow
per adj
for ha
(£)
4,282
140
325
4,097
1,125
29
105
347
1,606
2,491
37
2,454
na
110
569
1,490
5
18
0
13
37
101.0
46
Organic Farming in England 2014/15
Table 41 Organic dairy followers gross margin
No farms in sample
No farms
Sample
27
226
Production information
Enterprise grazing livestock units *
Adjusted forage area (including commons)
Stocking rate (GLUs per adj. forage ha.)
47.8
36.36
1.31
36,924
36,924
per adj
for ha
(£)
1,015
1,015
15,350
1,383
941
4,866
22,541
14,383
404
13,979
422
38
26
134
620
395
11
384
Enterprise Output
Cattle output
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Dairy heifer transfer or sale price £
Finished cattle price £
Store cattle price £
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excluding commons
1,382
934
770
2
6
0
3
11
36.85
* excludes stock away on agistment
47
Organic Farming in England 2014/15
Table 42 Organic LFA Suckler cows gross margin
No farms in sample
No farms in population
Production information
Average cow numbers
Enterprise grazing livestock units *
Calves per cow
Herd replacement rate (%)
Adjusted forage area (including commons)
Stocking rate (cows per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
Enterprise Output
Suckler calves †
Less Herd Depreciation
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs
Gross Margin after forage (A-B) = (C)
Prices
Calf price (£/calf) *
Cull cow price (£/cow)
Replacement heifer/cow price (£/head)
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excluding commons
Sample
18
111
44
43.3
0.95
18%
56.65
0.78
0.76
Total
538
72
466
per adj
for ha
(£)
422
57
365
27
14
27
52
120
346
9
337
21
11
21
40
93
272
7
265
per cow
(£)
23,930
3,205
20,725
1,181
624
1,190
2,291
5,286
15,439
391
15,048
(£)
541
876
1,074
3
2
0
2
7
95.95
* excludes stock away on agistment
† Calf price is as sold off the cow or a transfer value at weaning
48
Organic Farming in England 2014/15
Table 43 Organic lowland suckler cows gross margin
Sample
No farms in sample
No farms in population
Production information
Average cow numbers
Enterprise grazing livestock units *
Calves per cow
Herd replacement rate (%)
Adjusted forage area (including commons)
Stocking rate (cows per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
Enterprise Output
Suckler calves †
Less Herd Depreciation
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs
Gross Margin after forage (A-B) = (C)
Prices
Calf price (£/calf) *
Cull cow price (£/cow)
Replacement heifer/cow price (£/head)
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Premium
62
1,226
27
408
28
28.1
0.99
16%
35.66
0.79
0.79
35
35.4
1.07
17%
45.03
0.78
0.79
per
adj
for ha
(£)
(£)
442
350
65
51
377
299
per
cow
Total
(£)
12,490
1,828
10,661
682
437
551
1,445
3,114
7,547
294
7,253
24
15
19
51
109
268
10
258
19
12
15
41
87
212
8
204
(£)
19,403
1,733
17,670
per
adj
for ha
(£)
(£)
549
431
49
38
500
393
748
798
741
1,419
3,707
13,963
206
13,757
21
23
21
40
105
395
6
389
Total
519
763
1,007
597
807
967
2
4
0
3
8
1
2
0
2
5
Unadjusted forage area excl. commons (ha)
32.02
* excludes stock away on agistment
† Calf price is as sold off the cow or a transfer value at weaning
per
cow
37.92
49
17
18
16
32
83
310
5
305
Organic Farming in England 2014/15
Table 44 Organic fat cattle from suckler bred calves or stores gross margin
No farms in sample
No farms
Sample
49
801
Premium
16
266
Production information
Enterprise grazing livestock units *
Adjusted forage area (including commons)
Stocking rate (GLUs per adj. forage ha.)
34.2
44.17
0.77
42.7
47.64
0.90
21,405
21,405
per adj
for ha
(£)
485
485
37,103
37,103
per adj
for ha
(£)
779
779
3,207
356
541
2,729
6,833
14,572
536
14,036
73
8
12
62
155
330
12
318
3,498
641
897
3,206
8,241
28,862
558
28,304
73
13
19
67
172
607
12
595
Enterprise Output
Cattle output
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Dairy heifer transfer or sale price £
Finished cattle price £
Store cattle price £
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excl. commons (ha)
* excludes stock away on agistment
na
1,159
894
na
1,198
787
3
6
0
3
12
3
5
1
4
12
42.95
42.72
50
Organic Farming in England 2014/15
Table 45 Organic store cattle from suckler bred calves or stores gross margin
No farms in sample
No farms
Sample
27
558
Production information
Enterprise grazing livestock units *
Adjusted forage area (including commons)
Stocking rate (GLUs per adj. forage ha.)
14.1
19.35
0.73
7,844
7,844
per adj
for ha
(£)
405
405
835
148
175
1,222
2,379
5,465
95
5,369
43
8
9
63
123
282
5
277
Enterprise Output
Cattle output
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Dairy heifer transfer or sale price £
Finished cattle price £
Store cattle price £
Forage Costs
Fertilizer (£/ha)
Seed (£/ha)
Spray (£/ha)
Other crop costs (£/ha)
Total (£/ha)
Unadjusted forage area excl. commons (ha)
* excludes stock away on agistment
na
849
718
1
2
0
2
5
18.69
51
Organic Farming in England 2014/15
Table 46 Organic lowland sheep gross margin
2014 lamb crop
No farms in sample
No farms in population
Production information
Average ewe numbers
Enterprise grazing livestock units *
Lambs reared per ewe
Flock replacement rate (%)
Adjusted forage area (incl. commons)
Stocking rate (ewes per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
Enterprise Output
Lambs †
Wool
Less Flock Depreciation
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
Prices
Sample
Premium
39
548
20
183
190
29.9
1.40
26%
35.05
5.42
0.85
244
38.6
1.55
29%
41.02
5.94
0.94
Total
(£)
20,127
546
3,041
17,632
2,411
446
1,464
2,108
6,428
11,204
319
10,885
per per adj
ewe for ha
(£)
(£)
106
574
3
16
16
87
93
503
13
2
8
11
34
59
2
57
%
sales
76
80
46
18
111
2
95
55
1.08
96
£/hd
69
13
42
60
184
319
9
310
(£)
31,696
769
2,934
29,532
per
ewe
(£)
130
3
12
121
per adj
for ha
(£)
773
19
72
720
2,413
866
1,985
2,962
8,225
21,307
370
20,936
10
4
8
12
34
87
2
85
59
21
48
72
200
520
9
511
Total
£/hd
Fat Lamb price
79
Store Lamb price
66
Ewe Lamb price
62
Draft ewe price
134
Cull ewe price (£/ewe)
67
Wool price (£/kg)
1.02
Replacement price (£/head)
98
Forage Costs
Fertilizer (£/ha)
2
2
Seed (£/ha)
5
4
Spray (£/ha)
0
0
Other crop costs (£/ha)
2
2
Total (£/ha)
9
9
Unadjusted forage area excl. commons (ha)
37.73
41.81
* excludes stock away on agistment, † includes all enterprise output except wool
%
sales
97
1
2
52
Organic Farming in England 2014/15
Table 47 Organic LFA sheep gross margin
Sample
No farms in sample
No farms in population
Production information
Average ewe numbers
Enterprise grazing livestock units *
Lambs reared per ewe
Flock replacement rate (%)
Adjusted forage area (including commons)
Stocking rate (ewes per adj. forage ha.)
Stocking rate (GLUs per adj. forage ha.)
Enterprise Output
Lambs †
Wool
Less Flock Depreciation
Total Output (A)
Variable Costs
Concentrates
Coarse fodder
Vet and Medicines
Other livestock costs
Total Variable Costs (B)
Gross Margin before forage (A-B) = (C)
Forage Variable Costs (D)
Gross Margin after forage (C-D) = (E)
15
98
428
59.1
1.43
29%
76.30
5.61
0.78
Total
(£)
50,972
1,030
5,231
46,771
5,810
1,216
3,973
4,297
15,297
31,474
707
30,768
119
2
12
109
per adj
for ha
(£)
668
14
69
613
14
3
9
10
36
73
2
71
76
16
52
56
200
413
9
404
per ewe
(£)
Prices
£/hd
% sales
Fat Lamb price
77
84
Store Lamb price
50
10
Ewe Lamb price
90
6
Draft ewe price
114
Cull ewe price (£/ewe)
62
Wool price (£/kg)
0.99
Replacement price (£/head)
97
Forage Costs
Fertilizer (£/ha)
4
Seed (£/ha)
2
Spray (£/ha)
0
Other crop costs (£/ha)
2
Total (£/ha)
9
Unadjusted forage area excl. commons (ha)
109.87
* excludes stock away on agistment, † includes all enterprise output except wool
53
Organic Farming in England 2014/15
6
APPENDIX 1 – ORGANIC CROPPING
Performance of Organic Arable Businesses
Market Overview and Organic Crop Areas
In a second successive year of increased sales of organic foods, the total UK market was
£1.86 billion in 20142. Sales of organic products increased by four per cent, led by box
schemes, the main driver of this growth, with sales increasing by 11.7 per cent. Produce
World launched a branded organic vegetable box, to be marketed through Ocado, in October
20143.
Despite this increase in the overall market for organic produce in 2014, there was a further
reduction in the number of organic arable producers in England and a corresponding
reduction in the area of organic crops. However, increased demand for organic breakfast
cereals resulted in an increase in the area of organic oats.
As shown in Figure 6.1, in England, the area of organic crops reduced by 1,755 hectares to
46,800 hectares, representing 1.2 per cent of the area of all arable crops 4. This was the fourth
successive reduction in the organic crop area and the lowest area grown since 2006.
However, this four per cent decline was not as great as in previous years. Some 1,100
hectares of crops were recorded as in-conversion to organic.
In 2014, there were 2,227 organic crop producers (2,299 in 2013), of which 1,082 were
located in the South West region. In comparison with 2009, there were 24 per cent fewer
organic crop producers in 2014. The decline was greatest in the East of England and East
Midlands where there were 33 per cent fewer organic crop producers in 2014 than in 2009.
area of organic crops (hectares)
Figure 6.1 Area of Organic Crops in England, 2005 to 2014
70000
60000
50000
40000
30000
20000
10000
0
2005
2006
2007
2008
Cereals
Wheat
Other cereals
Potatoes
2009
2010
2011
Other crops
Barley
Fodder silage and other crops
Vegetables
2012
2013
2014
Vegetables and potatoes
Oats
Other break crops
2 Soil Association, 24 February 2015
3 Produce World, October 2014
4 Organic Farming Statistics 2014, 23 June 2015, Defra
54
Organic Farming in England 2014/15
At 11,700 hectares, the organic wheat area was six per cent higher than the unusually small
wheat crop of 2013, although still 22 per cent lower than the five year average. The organic
barley area of 9,900 hectares was 11 per cent below the five year average, but the area of oats
has increased annually since 2011 to reach 8,700 hectares in 2014, eight per cent higher than
the five year average. Organic ‘other cereals’ accounted for 16 per cent of the total crop and
organic oats accounted for eight per cent of the total crop showing that organic oats, rye and
spelt are attractive cereals to consumers. This is consistent with the news that sales of
organic breakfast cereals increased by 4.2 per cent in 2014, relative to 2013. We are aware of
a decline in the number of producers of organic triticale and there were insufficient growers
of this crop for us to report gross margins in 2013 or 2014.
The area of organic vegetables was 17 per cent lower than in 2013 and 34 per cent below the
five year average. Although the organic potato area, at 800 hectares, was similar in 2014 to
2013, this was 22 per cent lower than the five year average. These development explain the
two per cent reduction in sales of organic vegetables between 2013 and 2014.
The Sample of Organic Farms
The sample of the grouped organic Cereals and General Cropping arable farms in the Farm
Business Survey amounted to 22 farms (also 22 in 2013/2014). In comparison with the
previous year, these farms were about 20 per cent smaller, and carried less livestock.
We report results if there are at least ten farms in a sample. We advise caution when
comparing results from smaller groupings of farms, of less than about 15 farms.
Organic Business Performance
Given the small sample size and variability between farms, the reported annual change in
farm performance should be treated as indicative only. At -£91 per hectare the contribution
of agriculture to the Farm Business Income (FBI) or organic arable farms was similar to the £84 per hectare recorded in 2013/2014.
The reduced crop output resulted from lower crop prices, partially mitigated by higher yields
and, although seed costs were lower, organic farmers spent more on permitted fertilisers and
crop protection products.
Within the sample of arable businesses in the FBS, about 12 per cent of the area of
combinable crops comprised pulses and 84 per cent were cereals. About 35 per cent of this
area of cereals was used to cultivate crops other than wheat or barley, of which oats were the
most popular.
Organic Crop Performance
In common with non organic businesses, organic produces grew high yielding crops in 2014;
these were often of good quality. However, production economics were dominated by
reduced crop base prices. Demand for high quality cereals for human consumption ensured
relatively high organic premiums for spring wheat and spring oats. The net effect was that
the output and gross margin of spring barley and winter wheat crops were considerably below
average, whilst the output and gross margin of other crops were above average. These results
are shown in figure 6.2.
55
Organic Farming in England 2014/15
For most crops, variable costs exceeded the five year average although, seed costs generally
reduced from the exceptional prices paid in 2013.
Figure 6.2 Organic Gross Margins 2012 to 2014
1000
gross margin (£ per hectare)
900
800
700
600
2012
500
400
2013
300
2014
200
100
0
winter
wheat
spring
wheat
spring
barley
winter
oat
spring
oat
spring
bean
Increased demand for high quality cereals for human consumption appears to have translated
into improved organic premiums for spring wheat and spring oats, as shown in figure 6.3
alongside the more consistent organic price premium for winter wheat.
Figure 6.3 Organic Price Premium, Wheat and Oats, 2009 to 2014
organic price premium (£ per tonne)
120
100
80
winter wheat
60
spring wheat
spring oats
40
20
0
2009
2010
2011
2012
2013
2014
Winter Wheat
At £757 per hectare, the organic winter wheat gross margin was 13 per cent below the five
year average, but still the highest gross margin in comparison with the other organic
combinable crops. Although the yield of 4.0 tonnes per hectare was equivalent to the five
year average, the price, of £215 per tonne, was ten per cent lower. However, this was £85 per
tonne higher than the average price for non organic wheat.
56
Organic Farming in England 2014/15
Table 6.1 Agriculture Output and Costs
Agriculture Output & Costs - Organic farms in England (Cereals and General Cropping)
2013/14
Farms in Sample
Area of farm (hectares)
Owner occupied area (%)
AGRICULTURAL OUTPUT (£)
Crop output (excluding subsidies)
Livestock output (excluding subsidies)
Subsidies to agriculture
Other agricultural output (inc work on other farms)
2014/15
22
22
166.9
130.3
62.8
64.0
Per farm
Per hectare
Per farm
Per hectare
117,619
705
85,564
657
7,733
46
2,993
23
227
1
11,277
68
5,717
44
136,856
820
94,274
724
27,065
162
21,192
163
2,670
16
857
7
671
4
32
0
30,406
182
22,081
169
106,449
638
72,193
554
Regular labour
20,557
123
13,872
106
Casual labour
5,701
34
4,581
35
Machinery fuel and oil
9,828
59
6,263
48
Other machinery costs (excl. fuel, oil, depreciation)
8,070
48
5,526
42
Machinery, glasshouse and other depreciation
15,360
92
11,760
90
Contract costs
17,268
103
12,912
99
TOTAL AGRICULTURAL OUTPUT
AGRICULTURAL COSTS
VARIABLE COSTS (£)
Crop specific costs
Livestock specific costs
Miscellaneous variable costs (inc work on other farms)
TOTAL VARIABLE COSTS
GROSS MARGIN (£)
FIXED COSTS (£)
Bank charges and professional fees
Water, electricity, & general
Net interest
4,074
24
3,135
24
10,289
62
7,979
61
1,995
12
868
7
5
0
90
Write-off of bad debts
Rent paid
Property maintenance
Depreciation of buildings and works
Miscellaneous fixed costs (inc work on other farms)
TOTAL FIXED COSTS (£)
Profit/ (Loss) on sale of assets
FARM BUSINESS INCOME (Agriculture - £)
CROPPING (mean area (hectares))
16,526
99
11,741
527
3
376
3
3,078
18
2,405
18
8,413
50
3,205
25
121,685
729
84,627
650
1,180
7
566
4
-14,056
-84
-11,868
-91
ha
ha
Wheat
23.4
16.7
Barley
14.5
8.4
Other cereals crops
17.1
13.6
Peas or beans harvested dry
11.6
5.6
Oilseeds
0.7
1.9
Potatoes
1.6
1.7
Sugar beet
-
-
Horticultural crops
4.6
3.5
57
Organic Farming in England 2014/15
In June 2014, organic winter wheat, for harvest movement, was £210 per tonne, but by
August, the price had reduced to £194 per tonne in the context of a large overall cereal
harvest. This set the scene for the rest of the calendar year as October prices dipped to £188
per tonne, rallying to £202 per tonne in December, before slipping to £198 per tonne in
March5. Organic feed wheat traded at about £196 in April6.
Then following detection of pesticides in imported Ukrainian wheat that had been marketed
as organic, UK organic poultry producers were forced to look at alternative and more local
sources of supply of feed7. This led to a sharp increase in the prices of all organic feed crops,
led by a £19 per tonne price increase for wheat to £215 per tonne8. As the 2015 harvest
approached, Saxon Agriculture reported significant quantities of unsold 2014 crop on farm9.
Organic milling wheat tended to have low protein levels so generous premiums were
available for crops with protein levels exceeding 10.5 per cent. In March, this premium was
about £30 per tonne.
5 Saxon Organic Briefing, March 2015
6 Saxon Organic Briefing, April 2015
7 Farmers Weekly Interactive, www.fwi.co.uk , 20 April 2015
8
Saxon Organic Briefing, May 2015
9
Saxon Organic Briefing, July 2015
58
Organic Farming in England 2014/15
Table 6.2 Winter wheat gross margin
Gross Margin - Winter Wheat - Organic
Farms in Sample
2013/14
2014/15
22
26
Per farm Per hectare
Area per farm (hectares)
31.50
Yield (tonnes and tonnes per hectare)
117.7
Price (£ per tonne)
Per farm Per hectare
17.96
3.7
266
72.1
4.0
215
OUTPUT (£)
Crop sold
30,071
955
13,639
759
Feed used on-farm
1,186
38
1,827
102
Straw and by-products
1,281
41
1,052
59
32,538
1,033
16,517
920
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
4,102
130
1,847
103
Fertilisers
869
28
555
31
Crop protection
164
5
201
11
Other crop costs
204
6
276
15
67
2
36
2
5,406
172
2,916
162
27,132
861
13,601
757
Drying and heating costs
TOTAL VARIABLE COSTS
GROSS MARGIN (£)
Spring Wheat
The organic spring wheat gross margin was £714 per hectare, the best performance for this
crop since it achieved £725 per hectare in 2010, at an identical average high yield of 3.3
tonnes per hectare.
In comparison with 2013, the price was lower at £241 per tonne. However, as shown in
figure 6.3, this still represented a considerable organic price premium of £97 per tonne and
was £26 higher than the organic winter wheat price.
Variable cost expenditure reduced from £218 to £714 per hectare following a £68 per hectare
reduction in the seed price to £91 per hectare.
59
Organic Farming in England 2014/15
Table 6.3 Spring wheat gross margin
Gross Margin - Spring Wheat - Organic
Farms in Sample
2013/14
2014/15
20
15
Per farm Per hectare
Area per farm (hectares)
Yield (tonnes and tonnes per hectare)
Price (£ per tonne)
13.25
37.8
Per farm Per hectare
27.45
2.8
252
91.4
3.3
241
OUTPUT (£)
Crop sold
9,328
704
21,175
772
Feed used on-farm
181
14
883
32
Straw and by-products
538
41
2,004
73
10,046
758
24,063
877
2,106
159
2,505
91
408
31
973
35
22
2
45
2
333
25
846
31
14
1
109
4
TOTAL VARIABLE COSTS
2,884
218
4,478
163
GROSS MARGIN (£)
7,163
541
19,584
714
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
Fertilisers
Crop protection
Other crop costs
Drying and heating costs
Spring Barley
Spring barley was the most commonly grown organic arable crop, probably because it has a
role on both predominantly arable, as well as mixed businesses. Some 19 per cent of organic
spring barley production was fed to livestock on the farm.
The organic spring barley gross margin, of £525 per hectare, was 23 per cent lower than the
five year average. This lower performance was due mainly to the low price of £185 per
tonne, which was £59 per tonne higher than the non organic price.
At 3.3 tonnes per hectare, the average spring barley yield was similar to both the previous
year and to the five year average.
Variable cost expenditure was eight per cent below the five year average at £146 per hectare,
but seed expenditure reduced by six per cent relative to the high costs incurred in 2013.
60
Organic Farming in England 2014/15
In June 2014, the harvest price of organic spring barley was £204 per tonne. In early 2015,
barley traded at a premium to wheat, but by March, the price had fallen back to around £195
per tonne and characteristically lower than the wheat price10. With little demand in April, the
organic feed barley price was £190 per tonne11. The price of organic barley increased to
£210 per tonne in May due to reduced availability of imported crop12. In April, the premium
for organic malting barley was around £20 per tonne.
Table 6.4 Spring barley gross margin
Gross Margin - Spring Barley - Organic
2013/14
Farms in Sample
2014/15
37
41
Per farm Per hectare
Area per farm (hectares)
Yield (tonnes and tonnes per hectare)
Price (£ per tonne)
19.10
63.8
Per farm Per hectare
14.68
3.3
239
48.7
3.3
185
OUTPUT (£)
Crop sold
12,346
646
7,115
485
Feed used on-farm
2,891
151
1,898
129
Straw and by-products
1,434
75
840
57
16,671
873
9,854
671
2,002
105
1,457
99
517
27
397
27
42
2
24
2
359
19
215
15
95
5
50
3
3,016
158
2,143
146
13,656
715
7,711
525
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
Fertilisers
Crop protection
Other crop costs
Drying and heating costs
TOTAL VARIABLE COSTS
GROSS MARGIN (£)
Winter and Spring Oats
The organic winter oat crop generated a gross margin of £749 per hectare, eight per cent
higher than the five year average. It yielded 4.4 tonnes per hectare, which was 26 per cent
higher than the five year average. The price, of £188 per tonne, was 17 per cent below the
five year average but £67 per tonne higher than the non organic price. Of all combinable
organic crops, winter oats produced the highest value of straw, which at £84 per hectare,
accounted for nine per cent of the output of the crop. Variable costs averaged £155 per
hectare of which the seed cost accounted for £108 per hectare.
The organic spring oat gross margin was £599 per hectare, four per cent above the five year
average. Unusually for the season, the yield and price, of 3.1 tonnes per hectare and £214 per
hectare respectively, were near to five year average levels. In this case, the price was double
10 Saxon Organic Briefing, March 2015
11 Saxon Organic Briefing, April 2015
12
Saxon Organic Briefing, May 2015
61
Organic Farming in England 2014/15
the average price received for non organic spring oats representing an exceptional level of
premium of £102 per tonne.
In October, feed oats traded for £165 per tonne, rising to £174 in December, but remaining at
around £175 per tonne in March and dipping to £172 per tonne in April13. The premium for
organic milling oats was around £25 per tonne in December, reducing to £20 per tonne in
April14.
Reflecting strong demand for organic oats, seed was in demand and, as an exception to the
trend of reducing seed costs; expenditure was almost unchanged on the previous year at £85
per hectare.
13 Saxon Organic Briefing, April 2015
14 Saxon Organic Briefing, April 2015
62
Organic Farming in England 2014/15
Table 6.5 Winter oats gross margin
Gross Margin - Winter Oats - Organic
Farms in Sample
2013/14
2014/15
17
17
Per farm Per hectare
Area per farm (hectares)
9.91
Yield (tonnes and tonnes per hectare)
26.1
Price (£ per tonne)
Per farm Per hectare
13.50
2.6
237
58.9
4.4
188
OUTPUT (£)
Crop sold
5,488
554
10,113
749
Feed used on-farm
701
71
951
70
Straw and by-products
774
78
1,136
84
6,963
703
12,199
904
1,149
116
1,460
108
230
23
264
20
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
Fertilisers
Crop protection
4
0
59
4
235
24
301
22
53
5
11
1
TOTAL VARIABLE COSTS
1,670
169
2,095
155
GROSS MARGIN (£)
5,293
534
10,104
749
Other crop costs
Drying and heating costs
Table 6.6 Spring oats gross margin
Gross Margin - Spring Oats - Organic
Farms in Sample
2013/14
2014/15
30
34
Per farm Per hectare
Area per farm (hectares)
Yield (tonnes and tonnes per hectare)
Price (£ per tonne)
13.35
35.6
Per farm Per hectare
12.67
2.7
225
39.4
3.1
214
OUTPUT (£)
Crop sold
7,485
561
7,686
607
Feed used on-farm
534
40
757
60
Straw and by-products
658
49
981
77
8,677
650
9,423
744
1,117
84
1,081
85
221
17
294
23
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
Fertilisers
Crop protection
Other crop costs
Drying and heating costs
17
1
14
1
340
25
423
33
29
2
31
2
TOTAL VARIABLE COSTS
1,722
129
1,842
145
GROSS MARGIN (£)
6,955
521
7,581
599
63
Organic Farming in England 2014/15
Spring Beans
To provide more detailed information about bean gross margins ahead of the 2015 CAP
reform, we calculated gross margins for spring beans in the 2014/2015 Farm Business Survey
rather than reporting the gross margin for ‘beans for stockfeed, whether they were winter or
spring crops. Results from our sample of only ten farms should be treated with caution this
year.
The organic spring bean gross margin was £710 per hectare, achieved with a yield of 3.2
tonnes per hectare and an average price of £271 per tonne. The non organic bean price
averaged £207 per tonne in 2014.
Variable costs averaged £151 per hectare of which seed accounted for £100 per hectare.
In October, the bean price was £260 per tonne, rising to £265 per tonne in December and
£275 per tonne in March15. By April the price was £270 per tonne16.
Table 6.7 Beans gross margin
Gross Margin - Spring Beans Harvested Dry - Organic
2013/14
Farms in Sample
10
Per farm Per hectare
Area per farm (hectares)
Yield (tonnes and tonnes per hectare)
Price (£ per tonne)
2014/15
Per farm Per hectare
20.10
63.8
3.2
271
OUTPUT (£)
Crop sold
15,644
778
1,654
82
17,298
861
2,020
100
Fertilisers
349
17
Crop protection
237
12
Other crop costs
365
18
Feed used on-farm
TOTAL OUTPUT
VARIABLE COSTS (£)
Seeds (including homegrown)
Drying and heating costs
TOTAL VARIABLE COSTS
GROSS MARGIN (£)
55
3
3,027
151
14,271
710
15 Saxon Organic Briefing, March 2015
16
Saxon Organic Briefing, April 2015
64
Organic Farming in England 2014/15
7
APPENDIX 2 – ORGANIC LOWLAND CATTLE AND SHEEP
Organic Lowland Grazing Producers
Within the total Farm Business Survey sample there is a group of organic farms, and Table
7.1 compares the organic lowland grazing livestock farms with the conventional producers.
The organic farms are broadly similar in size to their conventional counterparts as is the
percentage of the land they own.
Output from the organic farms is lower when compared to conventional equivalents but the
difference is not statistically significant. However, there are important differences in how this
output is achieved; organic farms tend to get more than their conventional counterparts from
agri-environment schemes and less from livestock and crops. The output from the agrienvironment type schemes is approaching two and a half times higher for the organic
producers reflecting the extra support they receive as Organic Aid or Organic Entry Level
Stewardship.
65
Organic Farming in England 2014/15
Table 7.1 Farm Business Income for Conventional and Organic farms, 2014/15
Type of Production for
Number of farms in group
Average farmed area (hectares)
Average proportion of owned total farmed area
Output
Livestock and crops
Agri-environment type schemes
Single Payment Scheme
Other
Conventional
Organic
244
45
98.6
90.2
60%
67%
£ per farm
70,510
5,197
16,140
16,827
44,483
13,172
16,842
16,299
108,674
90,796
Variable costs
Livestock specific costs
Crop specific costs
24,048
8,250
11,029
2,530
TOTAL VARIABLE COSTS
32,298
13,559
TOTAL GROSS MARGIN
76,376
77,237
Fixed costs
Labour
Machinery
General farming costs
Land & Property
Interest paid
TOTAL FIXED COSTS
6,070
24,758
11,728
12,554
2,774
57,884
6,986
24,843
11,540
12,523
3,099
58,991
FARM BUSINESS INCOME
18,492
18,246
TOTAL FARM OUTPUT
With the lower ‘farming’ output, organic farms tend to have lower variable costs; being less
than half the level of conventional producers. The resulting total gross margin per farm for
the organic farmers is similar to the conventional level. Fixed costs for the organic farms are
also similar to the conventional producers. Thus the Farm Business Income per farm for the
organic producers is similar to that of their conventional counterparts.
Table 7.2 illustrates the sources of output and costs for the differing types of production
relative to the level of output achieved. The organic producers have higher environmental
type payments, Single Payment Scheme and Other output relative to total output, and less
‘livestock & crops’ which now amounts to less than a half of the output. This makes organic
production potentially more vulnerable to changes to the support given to farming in the form
of the Single Payment Scheme and the agri-environmental schemes, or depending on the
AES they could have a more reliable, constant income stream. The Conventional producers
are more reliant on the 'market place', compared to Organic producers, so are therefore less
affected by any changes to the support mechanisms.
66
Organic Farming in England 2014/15
For the organic producers the lower variable costs, but higher fixed costs in comparison to
output of the conventional producers result in very similar Farm Business Income per £100
output.
Both types of production have very 'strong' end of year balance sheets. Their balance sheet
ratios are very similar which is not unexpected with almost identical land owning structures.
Table 7.2 Type of Production- Income and Costs illustrated ‘Per £100 Output’, 2014/15
Type of Production
Number of farms in group
Average farmed area (hectares)
Average proportion of owned total farmed area
Output
Livestock and crops
Agri- environment type schemes
Single Payment Scheme
Other
Conventional Organic
244
45
98.6
90.2
60%
67%
£ per £100 output
65
5
15
15
49
15
19
18
100
100
Variable costs
Livestock specific costs
Crop specific costs
22
8
12
3
TOTAL VARIABLE COSTS
30
15
TOTAL GROSS MARGIN
70
85
Fixed costs
Labour
Machinery
General farming costs
Land & Property
Interest paid
TOTAL FIXED COSTS
6
23
11
12
3
53
8
27
13
14
3
65
FARM BUSINESS INCOME
17
20
TOTAL FARM OUTPUT
Table 7.3 illustrates some of the physical differences between the types of production; on
average, organic producers keep 77 fewer ewes and 20 fewer ‘Other cattle’, slightly more
than three quarters the level of the conventional total livestock units. Stocking rates on
organic farms are 87% of the conventional level, which in itself is not very high at 1.01
Livestock Units per hectare.
Organic producers tend to reseed their grassland more frequently so they have more
temporary grassland than conventional producers.
67
Organic Farming in England 2014/15
Table 7.3 Land and Livestock Details- Organic and Conventional Production, 2014/15
Number of farms in group
Farmed area (ha)
Crops (ha)
Temporary grass (ha)
Permanent grass (ha)
Rough grazing (ha)
Average No. of Beef cows
Average No. of Other Cattle
Average No. of Ewes
Total Livestock Units
GLU’s per adjusted Ha
Conventional
244
98.6
5.8
12.7
68.4
5.4
22
84
173
92
1.0
Organic
45
90.2
5.7
18.1
60.9
3.6
27
64
96
72
0.9
68
Organic Farming in England 2014/15
Table 7.4 Grazing Livestock (Lowland) farms in England
Gross Output, Variable Costs and Farm Gross Margin, 2014/2015
Type of Production
Conventional
Organic
Number of farms in group
244
45
Average farmed area (hectares)
98.56
90.23
Average proportion of owned total farmed area
60%
67%
£ per farm
Output
Cattle
38,778
28,528
Sheep
19,605
8,462
Other livestock
705
514
Crops
5,124
4,380
Forage
6,298
2,599
Environmentally Sensitive Area
19
0
Countryside Stewardship
491
41
Higher and Entry Level Stewardship
4,575
7,058
Organic Aid/ Organic Entry Level Stewardship
2
5,928
Other management/ agri- environment schemes
110
146
Single Payment Scheme
16,140
16,842
Rental income
5,292
2,991
Contract work
4,721
3,444
Miscellaneous output
6,784
9,838
Interest received
30
26
TOTAL FARM OUTPUT
108,674
90,796
Variable costs
Concentrates
Purchased fodder
Veterinary and medicines
Other livestock costs
Seeds
Fertilisers
Crop protection
Other crop costs
12,483
1,145
2,865
7,555
1,146
5,073
1,140
891
3,649
856
1,594
4,931
1,440
326
54
710
TOTAL VARIABLE COSTS
32,298
13,559
TOTAL GROSS MARGIN
76,376
77,237
69
Organic Farming in England 2014/15
Table 7.5 Fixed Costs, Farm Business Income, Farm Corporate Income and Farm
Investment Income 2014/15
TOTAL GROSS MARGIN
Type of Production
Conventional
Organic
£ per farm
76,376
77,237
Fixed costs
Paid regular labour
Directors remuneration
Casual labour
Contract
Machinery repairs
Machinery fuel
Machinery depreciation
Other depreciation
Electricity
Other fuel
Water
Insurance
Professional fees
Other general costs
Property maintenance
Rent, hired in keep and bare land
Rates
Buildings depreciation
Long-term interest
Short-term interest
TOTAL FIXED COSTS
4,863
20
1,187
6,084
4,552
4,833
9,289
0
1,140
280
1,038
3,673
2,261
3,336
4,388
4,791
127
3,247
1,885
889
57,883
3,540
2,951
495
4,492
4,411
3,807
12,132
1
997
218
874
2,966
2,903
3,582
4,545
4,904
67
3,008
2,392
707
58,990
FARM BUSINESS INCOME
18,493
18,247
Less - All unpaid labour
26,455
24,376
Equals - FARM CORPORATE INCOME
-7,962
-6,130
2,743
3,073
-5,219
-3,057
Plus - Net Interest
Equals - FARM INVESTMENT INCOME
70
Organic Farming in England 2014/15
Table 7.6 Alternative income measures 2014/15
Reconciliation between Net Farm Income and Farm Business Profit
Type of Production
Conventional
Organic
FARM BUSINESS INCOME
PlusLessPlusPlusPlusLessPlusLess-
Directors remuneration
Net income from assets associated
with the farm business
Buildings and works depreciation
Landlord type expenses
Imputed rental income
Imputed rent and rental value
Net Interest
Unpaid labour of partners
Equals-
NET FARM INCOME**
18,493
18,247
20
2,951
0
0
3,247
465
227
13,502
2,743
4,438
3,008
404
161
13,141
3,073
3,798
7,255
10,904
** Excluding Breeding Livestock Stock Appreciation
71
Organic Farming in England 2014/15
Table 7.7 Land use and indicators of technical efficiency 2014/15
Number of farms in group
Average farmed area (hectares)
Average proportion of owned total farmed area (%)
Land use
Area of crops
Temporary grass
Permanent grass
Fodder crops
Rough grazing
Uncropped, fallow and turf
Forage hired in
Type of Production
Conventional
Organic
244
45
98.56
90.23
60%
67%
5.8
12.7
68.4
1.6
5.4
0.6
4.1
5.7
18.1
60.9
0.5
3.6
0.4
1.1
Stocking
Average number of dairy cows
Average number of beef cows
Average number of other cattle
1
22
84
0
27
64
Average number of ewes
Average number of other sheep
173
182
96
97
Grazing livestock units
Dairy cows
Beef cows
Other cattle
Sheep
Other livestock
Total
GLUs per ha
GLUs per adjusted ha
GLU's per farm
0.6
11.2
51.4
27.2
1.5
91.8
1.00
1.01
0.0
13.5
41.8
15.1
1.3
71.8
0.85
0.88
72
Organic Farming in England 2014/15
Table 7.8 Balance Sheet 2014/15 (end of year)
Number of farms in group
Average farmed area (hectares)
Average proportion of owned total farmed area (%)
Type of Production
Conventional
Organic
244
45
98.56
90.23
60%
67%
£ per farm
End of year assets & liabilities
Land & buildings
Milk quota
Single Payment Scheme
Machinery
Tenant's other assets
Breeding livestock
Total fixed assets
Trading livestock
Crops
Forage and cultivations
Stores
Debtors and loans
Bank credit and cash
Other current assets
Total current assets
Total Assets
Financed by
AMC
Bank loans
Other long term
Total long term
HP and lease
Creditors
Bank overdraft
Other short term
Total current liabilities
Total Liabilities
Net worth
Balance sheet ratios
% Owner equity (net worth v.total assets)
% Fixed assets vs. total assets
Gearing (long-term loans v.total assets)
Total debt (external liabilities v.net worth)
1,080,727
0
21,394
55,439
226
44,370
1,202,155
49,737
1,532
6,239
5,647
8,495
23,132
0
94,783
1,296,938
1,177,669
0
22,637
70,900
288
38,622
1,310,115
33,029
1,139
3,425
1,717
8,367
16,939
0
64,616
1,374,732
16,380
34,981
8,438
59,800
4,748
9,279
16,063
121
30,211
90,011
15,187
44,799
6,696
66,683
5,030
7,044
13,841
39
25,954
92,637
1,206,927
1,282,094
93%
93%
5%
7%
93%
95%
5%
7%
73
Organic Farming in England 2014/15
Table 7.9 Fund flows 2014/15
Conventional
Number of farms in group
Average farmed area (hectares)
Average proportion of owned total farmed area(%)
Organic
244
98.56
60%
45
90.23
67%
£ per farm
Funds available from trading
Farm Business Income
Buildings and works depreciation
Machinery depreciation
Change in valuation *
18,493
3,247
9,289
121
18,247
3,008
12,133
-2,254
Trading net fund flow surplus
31,150
31,134
Funds used for farm investments
Net property and quota purchases
Net landlord capital purchases
Net machinery and equipment purchases
-7,203
4,406
10,144
2,887
5,052
10,743
7,348
18,682
Total farm fund flow surplus
23,802
12,452
Funds used for private expenditure
Private drawings
Net private funds introduced
22,788
-659
22,139
2,890
-23,447
-19,249
355
-6,797
4,933
5,271
-27
129
85
4,067
721
0
-1,130
2,320
-355
6,797
Capital net fund flow
Private fund outflow
Total net fund flow surplus
Increase in loans and deposits
Increase in bank balance
Increase in cash in hand
Increase in debtors
Increase in creditors
Net change in funding
* An increase in valuation is represented by a negative, with funds being used to
increase the live and deadstock valuation.
74
Organic Farming in England 2014/15
8
APPENDIX 3 – ORGANIC LFA CATTLE AND SHEEP
The 2014/15 FBS sample contains 237 English LFA grazing farms of which 23 are fully
organic farms. Within this there are 18 organic suckler herds, 13 organic upland flocks and 6
organic hill flocks.
Table 8.1 compares suckler herd performance to the gross margin (GM) and net margin (NM)
level across organic and non-organic farms. The organic suckler herd output is £73/cow more
than the non-organic output and with £46/cow less spent on variable costs (particularly
concentrates) the gross margin for organic sucklers is £119/cow more than the non-organic
average. As can be seen from the spread of GMs there is considerable variation across farms.
Organic fixed costs are £75/cow higher than the non-organics, but despite this, the organic
farms have a £44/cow advantage at the net margin level (excepting farmer and spouse
labour). After allowing for the farmer and spouse labour the final net margins are -£289/cow
and -£383/cow for organic and non-organic respectively. The stocking rate for the organic
farms, of 0.75 GLU/total adjusted area (including commons and all land rented in) is 6% less
than that of the non-organics.
Table 8.1 LFA Suckler Herd Performance Non-organic and Organic (£/cow)
2014/15
Number of farms
Number of farms (weighted)
Herd size (no. cows)
Enterprise Output (excluding BLSA)
BLSA
Total Variable costs
Concentrates
Purchased fodder and keep
Veterinary and medicines
Other livestock costs
Forage costs
Gross Margin (excluding BLSA)
Gross Margin range
Total Fixed costs
Total costs
Enterprise Net Margin (excluding BLSA)
Enterprise NM after F&S labour (excl. BLSA)
Stocking rate (GLUs/total adj ha)
All Suckler herds
Non-organics Organics
150
18
3924
105
38
53
£ per cow
387
460
7
2
196
150
48
26
21
13
23
28
49
49
55
33
191
310
-1149 to 563
41 to 468
400
596
-209
-383
0.80
475
624
-165
-289
0.75
Table 8.2 compares organic and non-organic Upland LFA flocks to the GM and NM level.
Organic enterprise output is £12/ewe higher than non-organic output at £109/ewe. Variable
costs per ewe are £9/head lower for the organics resulting in a gross margin of £69/ewe for
organic flocks and £48/ewe for the non-organic flocks. Fixed costs are £90/ewe for organic
flocks and £66/ewe for non-organics – this results in net margins (after farmer and spouse
labour) of -£38/ewe and -£51/ewe for organic and non-organic flocks respectively.
75
Organic Farming in England 2014/15
Table 8.2 SDA Flock Performance Non-organic and Organic
2014 lamb crop
Number of farms
Number of farms (weighted)
Flock size (no. ewes)
Enterprise Output (excluding BLSA)
BLSA
Total Variable costs
Concentrates
Purchased fodder and keep
Veterinary and medicines
Other livestock costs
Forage costs
Gross Margin (excluding BLSA)/Ewe
Gross Margin range
Total Fixed costs
Total costs
Enterprise Net Margin (excluding BLSA)
Enterprise NM after F&S labour (excl. BLSA)
Stocking rate (GLUs/total adj ha)
Lambing rate (born and reared/average no. ewes)
SDA flocks
Non-organics Organics
110
13
2894
74
476
522
£ per ewe
97.3
109.0
5.3
5.2
49.2
40.2
20.2
13.9
3.1
3.0
7.0
9.6
10.5
10.2
8.4
3.4
48.2
68.8
-37 to 125
7 to 137
66.3
115.5
-18.1
-51.1
0.74
1.42
89.7
129.9
-21
-38.4
0.74
1.43
Table 8.3 compares whole farm profitability across all four cost centres between the 22 fully
organic farms and the 215 non-organics in the sample. This table shows that the overall
difference in profit favours the organic farms by about £24,000 in Farm Business Income and
about £28,000 in Farm Corporate Income and Farm Investment Income. This greater
profitability is down to the higher profitability of the Agri-environmental cost centre (by over
£15,000) and the Single Farm payment cost centre (by £14,679) and despite the organic
Agriculture cost centre faring worse than the non-organics by £5,604. Clearly the large area
advantage that the organic farms enjoy goes some way to explain the difference in the Single
farm payment revenues – see Table 8.4. Organic farms also earn £375 less from
Diversification activities than the non-organic LFA farms. Table 8.4 compares the Organic
sample with the Non-organic sample through a series of land use, stocking, outputs and
variable costs. With an average area farmed of 314.5ha organic farms are over twice the size,
in area terms, of the non-organics (137ha) and while a large portion of this is rough grazing
none of this is on common land. Organic LFA farms are 36% owner occupied, against 49%
for the non-organics, and use 20% more labour (at 1.8 annual labour units) than the nonorganic average.
76
Non-organic Sample size (unweighted)
Number (weighted)
Organic Sample size (unweighted)
Number (weighted)
% contribution of centre revenue to total:
Total output (Revenue)
Variable costs
Total Gross margin
Fixed costs
Total Costs
Profit/(loss) on sale of fixed assets
Farm Business Income
Adjustment for unpaid manual labour
Farm Corporate Income
Interest payments (net of interest received)
Farm Investment Income
% contribution of centre total costs to total:
Derivation of farm income measures
215
6,457
22
120
(g=a-e+f)
(h)
(i=g-h)
(j)
(k=i+j)
(f)
(a)
(b)
(c=a-b)
(d)
(e=b+d)
Cost Centre (£ per farm)
Diversification out
Farm
Agriculture
of agriculture
Single Payment Scheme Income
NonNonNonNonorganic Organic
organic Organic
organic Organic
organic
66%
59%
4%
2%
19%
20%
62,230
99,903
4,077
3,629 17,810
33,932
94,908
36,769
48,163
93
80
2
2
36,875
25,460
51,741
3,984
3,549 17,807
33,930
58,033
37,385
69,250
1,776
1,716
2,610
4,052
44,049
74,154 117,413
1,870
1,796
2,612
4,054
80,923
211
192
211
-11,714 -17,318
8,504
24,140
2,208
1,832 15,198
29,877
14,195
23,791
20,014
558
1,212
995
509
0
0
25,344
-35,505 -37,332
7,946
22,928
1,213
1,323 15,198
29,877 -11,149
1,760
2,634
53
92
70
28
58
92
1,940
-33,745 -34,698
7,998
23,020
1,282
1,351 15,256
29,969
-9,208
92%
90%
3%
6%
2%
1%
2%
3%
Imputed rent (l)
8,969
Ownership charges (m)
2,848
Director's remuneration (n)
99
Unpaid labour of principal farmer and spouse (o)
21,230
Net Farm Income (p=k-l+m+n+o)
6,001
Holding gains not included in farm income (q)
29,669
Breeding Livestock Appreciation (BLSA) (r)
1,595
Revaluation of machinery, permanent crops, glasshouse, quota (s)
374
Revaluation of land (t)
27,699
Manager's paid managerial input (u)
28
Management and Investment Income (v=p-o+u)
-15,202
Agri-environment
and other payments
Nonorganic
Organic
11%
19%
10,791
31,594
10
1,521
10,781
30,073
2,278
5,933
2,288
7,454
Table 8.3 Farm Income measures by cost centre, Organic vs. Non-organic
2014 lamb year
16,107
5,688
1,849
18,075
29,145
41,784
1,859
529
39,396
60
11,130
169,058
49,766
119,292
80,952
130,718
192
38,532
21,736
16,796
2,845
19,641
Organic
Business
Organic Farming in England 2014/15
77
Organic Farming in England 2014/15
Table 8.4 Land use, Stocking, Outputs & Variable costs - Organic vs Non-organic
2014/15
Land Use & Stocking
Number (unweighted)
Number (weighted)
Total Area (includes woodland and roads etc) (ha)
Area Farmed (ha)
Net Land Hired In (ha)
Utilised Agricultural Area (ha)
Of which Total main products (ha)
Grass, fodder crops and rough grazing (ha)
Of which: rough grazing (unadjusted) (ha)
Adjusted rough grazing (sole occupation)
Adjusted rough grazing (shared)
Total Adjusted Utilised Agriculture Area (ha)
Area owner occupied (ha)
Area tenanted (ha)
Average age of farmer (years)
Agricultural labour units (ALU)
Standard Output size units (2010SO)
Standard Output size group (2010SO)
Land Use
Temporary Grassland Area (ha)
Permanent Grassland Area (ha)
Stocking
Total Beef cows
Total Cattle
Ewes (LFA and lowland)
Total Sheep
Livestock Units
Total Cattle LU
Total Sheep LU
Grazing LU (cattle, sheep, horses and others)
Outputs & Variable Costs
Farm Business Output
of which: Output from agriculture
Agri environment payment
Diversified output
Single Farm Payment
Livestock Enterprise Output
of which: Cattle Enterprise Output
Sheep Enterprise Output
Crop Enterprise Output
Non agriculture, no other category output
Variable Costs
Farm Business Variable Costs
Of which: Agriculture Variable Costs
Agriculture Crop Costs
Agriculture Livestock Costs
of which: Purchased Fodder Feed
Home Produced Fodder Feed
Veterinary and medicines
Other Livestock Costs
Agriculture Contract Costs
Agriculture Casual Labour
The Average LFA Farm
Non-organic
Organic
215
22
6,457
120
137.0
305.5
136.1
314.5
2.6
20.3
133.5
294.2
1.3
6.2
132.2
288.0
44.1
163.6
15.2
36.1
6.0
0.0
104.6
166.7
67.3
113.4
69.6
192.1
58
56
1.5
1.8
76,850
117,596
7
8
5.4
84.8
11.7
127.9
26
81
339
679
49
141
430
882
48
37
85
85
46
132
94,908
62,230
10,791
4,077
17,810
57,602
26,124
31,301
2,855
1,768
169,058
99,903
31,594
3,629
33,932
89,681
46,309
43,264
6,264
3,950
36,875
36,769
5,835
25,967
14,741
745
3,510
6,971
3,404
1,499
49,766
48,163
6,797
29,762
11,448
2,049
6,176
10,089
7,602
3,998
78
Organic Farming in England 2014/15
9
APPENDIX 4 – ORGANIC DAIRY PRODUCTION
Table 9.1: Outputs, Inputs and Margins for All Farms, Conventional and Organic
Number of farms
Area (ha)
All
13/14
14/15
303
286
150
152
£/ha
Conventional
13/14
14/15
267
254
151
152
£/ha
Organic
13/14
14/15
36
32
142
141
£/ha
Output
Milk
Calf
Lease Quota (net)
Other Dairy
Herd Replacement
Total Dairy Output
Other Livestock
Other
Total Farm Output
2816
126
0
1
-250
2692
524
504
3721
2728
122
0
1
-238
2613
494
517
3625
2853
128
0
1
-254
2727
531
507
3766
2755
123
0
1
-241
2639
501
521
3661
2065
88
0
0
-192
1962
361
419
2742
2048
84
0
0
-177
1955
319
430
2704
Variable Costs
Home-grown Concentrates
Purchased Concentrates
Coarse Fodder
Other Livestock Concentrates
Vet
and Medicine
ccCccCConcCConcentrates
Other Livestock Costs
Seed
Fertiliser
Crop Protection
Other Crop Costs
Total Variable Costs
58
926
92
9
104
256
42
137
32
22
1678
60
853
72
10
104
257
37
128
39
25
1586
58
942
94
9
105
257
42
142
34
22
1705
59
866
74
10
106
259
38
133
40
26
1609
77
580
69
1
65
234
37
19
2
12
1096
85
533
34
1
55
225
29
7
0
11
980
Fixed Costs
Labour
Contract
Machinery Depreciation
Other Machinery
Miscellaneous
Rent and Rental Equivalent
Total Fixed Costs
381
171
197
223
286
298
1556
387
183
195
214
294
311
1584
384
173
199
225
289
300
1570
389
185
197
216
296
313
1596
313
123
151
165
241
264
1257
319
133
142
150
245
276
1264
Net Farm Income
486
455
490
455
390
459
Farmer / Spouse Labour
197
201
197
200
205
214
Management and Investment
Income (MII)
289
254
294
255
185
245
Farm Business Income (FBI)
584
552
590
553
447
529
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Organic Farming in England 2014/15
Comparison of Conventional and Organic Farms
Table 9.1 also shows the performance of conventional and organic dairy farms.
In 2014/15 conventional farm’s FBI fell by 6% from £590/ha to £553/ha, whilst for organic
farms, FBI rose by 18% from £447/ha to £529/ha. On a per farm basis, conventional farm
FBI in 2014/15 equated to £84,056 compared to organic farm FBI of £74,589; a difference of
£9,467; in contrast to the previous year whereby conventional farm FBI was £89,090 and
organic farm FBI was £63,474 which equates to a difference of £25,616.
Conventional farm’s total farm output decreased by 3% from £3,766/ha to £3,661/ha; organic
total farm output decreased by 1%, from £2,742/ha to £2,704/ha.
On conventional farms, milk output fell by 3% from £2,853/ha to £2,755/ha. On organic
farms, milk output decreased by less than 1% from £2,065/ha to £2,048/ha.
Variable costs decreased by 6% from £1,705/ha to £1,609/ha on conventional farms
compared to a decrease of 11% from £1,096/ha to £980/ha on organic farms and thus
returning to levels comparable with the 2012/13 year.
Fixed costs increased by 2% on conventional and by less than 1% on organic farms resulting
in an increase from £1,570/ha to £1,596/ha on conventional farms compared to an increase
from £1,257/ha to £1,264/ha on organic farms.
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Organic Farming in England 2014/15
Table 9.2: Gross Margin Results for All Farms, Conventional and Organic
Number of farms
Average number cows
Average yield (litres)
Milk price (ppl)
All
13/14
14/15
283
268
163
169
7898
7826
32.5
30.7
£/cow
Conventional
13/14
14/15
249
236
164
171
7948
7876
32.4
30.5
£/cow
Organic
13/14
14/15
34
32
117
119
6211
6262
37.0
38.6
£/cow
Output
Milk
Calf
Lease Quota (net)
Other Dairy
Herd Replacement
Total Dairy Output
2568
116
0
1
-230
2455
2405
107
0
1
-209
2304
2576
116
0
1
-231
2462
2404
107
0
1
-209
2303
2295
102
0
0
-196
2201
2420
99
0
0
-209
2310
Variable costs
Concentrates
Coarse Fodder
Vet and Medicine
Other Livestock Costs
Forage Costs
Total Variable Costs
765
65
80
181
105
1195
678
50
78
177
101
1083
769
65
81
180
107
1202
680
50
78
175
103
1088
620
41
57
203
34
954
597
28
56
218
32
931
Total Gross Margin
1260
1221
1260
1215
1247
1379
Dairy Enterprise Results: Gross Margin for Conventional and Organic Farms
Studying the differences between conventional and organic farms in Table 9.2 shows that for
the farms studied the average herd size in 2014/15 is 119 cows for organic farms compared to
171 cows for conventional farms.
In the previous year’s edition of this report it was noted that in 2013/14 the combined
increase in both milk output (yield) and price per litre for conventional herds, coupled with a
static milk yield for organic farms has resulted in a widening of the difference in total dairy
output for the two systems. That is, in 2012/13, the conventional herds achieved a total dairy
output of £2,068/cow compared to £2008/cow for the organic herds, whilst in 2013/14 the
conventional herds recorded a total dairy output of £2,462/cow compared to the organic
herd’s total dairy output of £2,201/cow. However, in 2014/15, the organic herds total dairy
output increased by 5% to £2,310/cow compared to the fall in total dairy output for the
conventional herd of 6% to £2,303/cow and thus the conventional herd total dairy output fell
below the level achieved by the organic herd. This is predominantly a result of the fall in milk
price from 32.4ppl to 30.5ppl for the conventional herd in contrast to the rise in milk price
from 37.0ppl to 38.6ppl for the organic herd and the drop in yield of 72 litres to 7876 litres
for conventional herds compared to the rise in yield of 51 litres to 6262 litres for organic
herds.
The above figures equate to a rise in gross margin per cow for the organic herds and a fall in
gross margin per cow for the conventional herds, with organic herds returning the higher total
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Organic Farming in England 2014/15
gross margin. This is in contrast to the 2013/14 results whereby the organic herds returned a
lower gross margin per cow but reflects the 2012/13 results whereby the organic herds
returned a higher gross margin per cow. On a herd basis, conventional herds have a notably
higher average total gross margin (influenced by herd size) of £207,765/herd compared to
£164,101/herd for the organic farms.
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Organic Farming in England 2014/15
10 APPENDIX 5 – REPORTS IN THIS SERIES
Crop Production in England
Dairy Farming in England
Hill Farming in England
Horticulture Production in England (Horticultural Business Data)
Lowland Grazing Livestock Production
Pig Production in England
Poultry Production in England
Details available at: www.ruralbusinessresearch.co.uk
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Organic Farming in England 2014/15
11 APPENDIX 6 – DEFINITION OF TERMS
I. BUSINESS OUTPUTS, INPUTS, COSTS AND INCOME
1. Farm Business Income for sole traders and partnerships represents the financial return to
all unpaid labour (farmers and spouses, non-principal partners and directors and their spouses
and family workers) and on all their capital invested in the farm business, including land and
buildings. For corporate businesses it represents the financial return on the shareholders
capital invested in the farm business. It is used when assessing the impact of new policies or
regulations on the individual farm business. Although Farm Business Income is equivalent to
financial Net Profit, in practice they are likely to differ because Net Profit is derived from
financial accounting principles whereas Farm Business Income is derived from management
accounting principles. For example in financial accounting output stocks are usually valued
at cost of production, whereas in management accounting they are usually valued at market
price. In financial accounting depreciation is usually calculated at historic cost whereas in
management accounting it is often calculated at replacement cost.
2. Farm Corporate Income (FCI) represents the return on own capital invested in the farm
business, to risk and to entrepreneurship. It is derived by deducting unpaid labour, both
manual and managerial, from Farm Business Income. This allows the profitability of sole
traders and partnerships to be compared directly with that of companies. Currently we are
able to deduct an estimate of unpaid manual labour but not of unpaid managerial labour and
so the data are only approximate. However, we plan to undertake a research project to
produce a method for deriving an estimate of unpaid managerial labour, so that we can
produce better data for this measure in future.
3. Farm Investment Income (FII) represents the return on all capital invested in the farm
business whether borrowed or not, to risk and to entrepreneurship. It is a general measure of
the profitability of farming as an activity rather than of a particular business. It is derived by
adding net interest payments to Farm Corporate Income. Since currently the data for Farm
Corporate income are only approximate, so too are the data for Farm Investment Income.
4. Net Farm Income (NFI) is intended as a consistent measure of the profitability of
tenant-type farming 17 which allows farms of different business organisation, tenure and
17
Tenant-type farming was never conceived of as including non-agricultural activities on
farm (using farm resources) except perhaps for value added activities such as small-scale
food processing, e.g. sales of farm produced butter and cream and retail sales of farm
produced liquid milk. However, recent research has revealed that many of the more varied
non-agricultural activities which have been increasing on farms over the years have been
inadvertently included in the calculation of NFI, with the result that about three-quarters of
non-agricultural activities on farm by value are currently included and one-quarter excluded,
without any clear basis for this division. Although this means that the definition of NFI has
become untenable on the current basis, it has been decided to continue with historical practice
84
Organic Farming in England 2014/15
indebtedness to be compared. It represents the return to the farmer and spouse alone for their
manual and managerial labour and on the tenant-type capital18 invested in the farm business.
To represent the return to farmer and spouse alone, a notional deduction is made for any
unpaid labour provided by non-principal partners and directors, their spouses and by others;
this unpaid labour is valued at average local market rates for manual agricultural work.
To confine the measure to the tenant-type activities and assets of the business, an imputed
rent is deducted for owner-occupied land and buildings and for landlord-type improvements
made by the tenant. No deduction is made for interest payments on any farming loans,
overdrafts or mortgages; interest earned on financial assets is also excluded.
5. Cash income is the difference between total revenue and total expenditure. Revenue is:
receipts adjusted for debtors; and expenditure is: purchases adjusted for creditors. It is
assumed, therefore, that all end of year debtor and creditor payments are settled in full, even
though this may happen beyond the end of the accounting year. Cash income represents the
cash return to the group with an entrepreneurial interest in the business (farmers and spouses,
non-principal partners and directors and their spouses and family workers) for their manual
and managerial labour and on all their investment in the business.
6. Family farm income is a measure of farm income used by the European Commission. It
is based upon actual tenure and indebtedness. However, it is a broader measure than net farm
income in that it represents the return to all unpaid labour (farmers and spouses, non-principal
partners and directors and their spouses and family workers). It also includes breeding
livestock stock appreciation although it cannot be realised without reducing the productive
capacity of the farm.
II. CROPPING, STOCKING AND LABOUR TABLES
7. Utilised agricultural area is the crop area, including fodder, set-aside land, temporary
and permanent grass and rough grazing in sole occupation (but not shared rough grazing) i.e.
the agricultural area of the farm. It includes bare land and forage let out for less than one
year.
8. Total area of farm is the utilised agricultural area plus woodland and other areas of the
farm not used for agriculture (e.g. buildings, roads, water, household gardens).
for reasons of continuity, rather than to change the definition, pending the introduction of a
wider measure to include all on-farm business activities.
18
Tenant-type capital comprises livestock, machinery, crops in store, stocks of consumables,
work in progress, orchards, other permanent crops, glasshouses, cash and other assets needed
to run the business. It does not include land and buildings.
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Organic Farming in England 2014/15
9. Total tillage comprises the utilised agricultural area, plus bare land and forage hired in
from others in the accounting period, minus temporary and permanent grass and rough
grazing in sole occupation (but not shared rough grazing).
10. Total area farmed comprises the total area of the farm minus woodlands and buildings,
etc. plus net land hired in.
11. Adjusted utilised agricultural area comprises the utilised agricultural area with rough
grazing in sole occupation converted to a permanent pasture equivalent.
12. Stocking figures are the average annual level of stocking based on estimated average
livestock numbers on the farm for the year, including fractions for livestock on the farm for
less than a year.
13. Total livestock units are used as an approximate measure of stocking intensity and are
based on the estimated energy requirements of different species and ages of livestock. The
factors used are set out in Appendix 2 of 'Farm Incomes in the United Kingdom 1999/00'.
14. Annual labour units (ALU) are the estimated number of full time worker equivalents of
persons working on the holding during the year. Part-time workers are converted to full-time
equivalents in proportion to their actual working time related to that of a full-time worker.
One ALU represents one person employed for 2,200 hours.
[Standard labour requirements (SLR) are theoretical measures of representative labour
requirements under typical conditions for enterprises of average size and performance. Used
in the classification of farms by type and size there are 6 SLR size groups measured in Full
Time Equivalents (FTE) where 1 FTE equals 1900 hours per year. Farms considered “Spare
time” SLR band 1, less than 0.5 FTE or less than 949 imputed hours are excluded from the
Farm Business Survey. The 6 SLR size groups are:
SLR band
1
2
3
4
5
6
Descriptive
Very small, Spare time
Very small, Part time
Small, Full time
Medium, Full time
Large, Full time
Very large, Full time
FTE
<0.5
0.5 to <1
1 to <2
2 to <3
3 to <5
>5
Hours/year
1 - 949
950 – 1899
1900 – 3799
3800 – 5699
5700 – 9499
>9500
III. OUTPUTS, INPUTS AND FARM BUSINESS INCOME TABLES
15. Agricultural output is the main measure of individual crop and livestock output. It
comprises:
(a) Livestock enterprise output comprises the total sales of livestock and
livestock products including direct livestock subsidies and production grants
received, part of the valuation change (see below), produce consumed in the
86
Organic Farming in England 2014/15
farmhouse and by labour and the value of milk and milk products fed on the farm
(excluding direct suckling) adjusted for debtors at the beginning and end of the
year (except for direct livestock subsidies) and transfers between enterprises; less
purchases of livestock and livestock products from outside the farm business.
Stock appreciation for breeding livestock (cattle, sheep and pigs) has been
excluded from individual livestock enterprise outputs. However, changes in the
numbers of breeding livestock between the opening and closing valuation and the
total valuation change of trading livestock are included. Unlike crop enterprise
output, livestock enterprise output is calculated on an accounting year basis.
(b) By-products, forage and cultivations, which cover the value of output of the
by-products of agricultural activity, sales of fodder, valuation changes for fodder
and cultivations. It also covers revenue from the letting of bare land or forage on
a short-term lease.
(c) Crop enterprise output, which is the total value of crops produced by the
farm (other than losses in the field and in store). It includes crops used for feed
and seed by the farm business and those consumed in the farmhouse and by farm
labour. Crop enterprise output is calculated on a "harvest year" as distinct from
an "accounting year" basis; that is, it refers only to those crops (with the
exception of certain horticultural crops) wholly or partly harvested during the
accounting year and excludes any crop carried over from the previous year. Thus
valuation changes (between the previous and current crops) are not relevant and
the total harvested yield of the crop is valued at market prices (plus any
subsidies). However, any difference between the opening valuation of any stocks
of previous crops and their ultimate disposal value (sales, used on farm and any
end-year stocks) is included in total farm output.
(d) Miscellaneous output covers the value of output from those activities which
are still within the agricultural cost centre but do not fall within either livestock or
crop enterprise output. These will include revenue from wayleaves, agricultural
hirework, sundry woodland sales, contract farming rent, miscellaneous insurance
receipts and compensation payments.
16. Agricultural costs comprise payments and the estimated value of non-cash inputs,
including home-grown feed and seed, adjusted for changes in stocks and creditors between
the beginning and end of the year.
Total variable costs
These are taken to be costs of feed, veterinary fees and medicines, other livestock
costs, seeds, fertilisers, crop protection and other crop costs.
Purchased
concentrate feed and
fodder
This represents expenditure on feeds and feed additives, including charges
for agistment.
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Organic Farming in England 2014/15
Home-grown
concentrate feed and
fodder
Veterinary fees and
medicines
Other livestock costs
This includes ex-farm value of all home produced cereals, beans, milk
(excluding direct suckling), etc. fed on the farm both from the current and
previous years' crops
This consists of veterinary fees and the cost of all medicines.
Purchased and
home-grown seeds
This comprises expenditure on purchased seeds, plants and trees adjusted
for changes in stocks. Home-grown seed from the previous crop is
included and charged at estimated market price: any seeds from current
crops and sown for a succeeding crop are excluded, but are included in the
closing valuation of the crop and hence in enterprise output. This enables
the value of home-grown seed used in the production of the current crop to
be identified.
Fertilizers
This includes lime, fertilisers and other manures, and is adjusted for
changes in stock. Fertilisers sown for next year's crops are treated as if
they were still in store and are included in the closing valuation.
Crop protection
This includes costs of pre-emergent sprays, fungicides, herbicides, dusts
and insecticides and other crop sprays.
Other crop costs
These comprise all crop inputs not separately specified, e.g. marketing
charges, packing materials, British Potato Council levy, baling twine and
wire (though not fencing wire).
Total fixed costs
These are the costs of labour, machinery, contract work, land and buildings,
other general farming costs and depreciation.
Labour (excluding
farmer and spouse)
This comprises wages and employer's insurance contributions, payments in
kind, and salaried management. To calculate net farm income an imputed
charge for unpaid labour is made, excluding that of the farmer and spouse,
valued at the rate of comparable paid labour. The value of the manual
labour of the farmer and spouse is not charged as an input in calculating net
farm income (i.e. it is a component of net farm income).
Contract costs
These costs include expenditure on work carried out by agricultural
contractors, including the costs of materials employed, such as fertilisers,
unless these can be allocated to the specific heading. Costs of hiring
machines to be used by the farm’s own labour are also included.
Expenditure on contract labour is only included here if it is associated with
the hiring of a machine. Otherwise it is entered under (casual) labour.
Machinery running
costs
These represent the cost of machinery and equipment repairs, fuel and oil
and car mileage expenses. It excludes depreciation.
Land and building
inputs
For the calculation of farm business income these comprise any rent paid,
insurance, rates and repairs to land and buildings incurred by the whole
business. In the derivation of net farm income land and building costs also
include an imputed rental charge for owner occupiers but exclude those
costs associated with land ownership such as the insurance of farm
buildings, and landlord-type repairs and upkeep.
This comprises straw bought specifically for costs bedding materials,
breeding costs (including AI and stud fees), miscellaneous dairy expenses,
disinfectants, marketing and storage costs of animal products, Milk
Development Council levy and other livestock costs not separately
identified.
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Organic Farming in England 2014/15
Depreciation of
machinery,
glasshouses and
permanent crops
Depreciation provisions in respect of machinery, glasshouses and
permanent crops (e.g. orchards) are shown on a current cost basis. The
rates of depreciation used (generally on a diminishing balance basis for
machinery and straight line for glasshouses and permanent crops) are
intended to reflect the degree of deterioration of the assets.
Other general
farming costs
These consist of electricity, heating fuel, water for all farming purposes,
insurance (excluding labour and farm buildings), bank charges,
professional fees, vehicle licences, and other miscellaneous expenses not
recorded elsewhere.
Interest payments
Interest charges on loans taken out for business purposes, net of interest
receipts on monies invested temporarily outside the business, are deducted
in the calculation of farm business income.
Depreciation of
buildings and works
This is calculated on a current cost basis (generally on a straight line basis
over 10 years) with an adjustment to allow for the effect of capital grants.
17. Breeding livestock stock appreciation represents the change in market prices of breeding
cattle, sheep and pigs between the opening and closing valuations. It is not included in the
calculation of farm business income but is shown separately within table 3.
IV. BALANCE SHEET TABLES
18. Total fixed assets include milk and livestock quotas, as well as land, buildings, breeding
livestock, and machinery and equipment. For tenanted farmers, assets can include farm
buildings, cottages, quotas, etc., where these are owned by the occupier.
19. Liquid assets comprise cash and sundry debtors.
20. Bank term loans and other long and medium term loans are loans which exceed 12
months.
21. Net Worth represents the residual claim or interest of the owner in the business. It is the
balance sheet value of assets available to the owner of the business after all other claims
against these assets have been met.
V. IMPLIED OUTPUT PRICES
22. Implied output prices are average unit returns excluding direct subsidies. For crops they
are calculated by dividing the value of sales, closing stocks, farm house consumption,
benefits in kind and own-produced feed by total production. Sales are value at prices actually
received at the farm gate before the deduction of marketing charges paid direct by the farmer
such as drying and cleaning costs. More detailed information about sales volumes is
collected for livestock and, in this case, the unit returns refer to sales of livestock including
casualties. In both cases, any compensation payments or insurance payouts for output
produced in the current year and destroyed are included.
89
Organic Farming in England 2014/15
Source: DEFRA – Farm Accounts in England 2006/2007
http://webarchive.nationalarchives.gov.uk/20130315143000/http://www.defra.gov.uk/statistic
s/foodfarm/farmmanage/fbs/publications/farmaccounts/
Standard Output (SO)
SOs are representative of the level of output that could be expected on the average farm under
“normal” conditions (i.e. no disease outbreaks or adverse weather). Different SOs are
calculated for North England, East England, West England, Wales, Scotland and Northern
Ireland to allow for the differences in output in different areas.
Standard outputs measure the total value of output of any one enterprise - per head for
livestock and per hectare for crops. For crops this will be the main product (e.g. wheat,
barley, peas) plus any by-product that is sold, for example straw. For livestock it will be the
value of the main product (milk, eggs, lamb, pork) plus the value of any secondary product
(calf, wool) minus the cost of replacement.
Up until 2010, Standard Gross Margins were used for the classification of farms. The
difference between standard outputs and standard gross margins is that no variable costs are
deducted in the derivation of standard outputs. A Defra note looking at the effects on the
population by farm type as a result of the change from SGM’s to SO’s is available at:
http://webarchive.nationalarchives.gov.uk/20130123162956/http:/www.defra.gov.uk/statistic
s/files/defra-stats-foodfarm-farmmanage-fbs-reviseclass_111221.pdf/
The SOs now in use are based on a five-year average centred on 2010. SO’s are based on a
five-year average in order to lessen the impact of yearly fluctuations on calculated SOs.
The 2010 SO’s for England can be seen on Annex 1 under UK Farm Classification on the
above site.
Source:
http://webarchive.nationalarchives.gov.uk/20130123162956/http:/www.defra.gov.uk/statistic
s/files/defra-stats-foodfarm-farmmanage-fbs-UK_Farm_Classification.pdf/
Adjusted Forage Area (adj. for. Ha)
The adjusted forage area allows an area of rough grazing to be equated to an equivalent area
of flat mowable land. This therefore reflects the true stock carrying capacity of a parcel of
land and allows meaningful comparisons on true farm stocking rates to be presented. This
measure is particularly important for LFA farms with large tracts of poor quality land.
Total Adjusted Area (TAA)
The total adjusted area includes; adjusted UAA, adjusted common grazing and short term
rentals (less than 1 year).
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Organic Farming in England 2014/15
REFERENCES
DEFRA (2011) Farming Statistics Note on the Revised EC Classification of Farm Types:
Effects on the June Survey Population and Farm Business Survey Sample in England.
[Online],
Available
at:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/182207/defrastats-foodfarm-landuselivestock-june-results-typology.pdf (Accessed: 26 January 2014).
DEFRA (2012) Farm Classification in the United Kingdom. Available at:
http://webarchive.nationalarchives.gov.uk/20130123162956/http://www.defra.gov.uk/statistic
s/files/defra-stats-foodfarm-farmmanage-fbs-UK_Farm_Classification.pdf (Accessed 22
December 2013).
DEFRA
(2016)
Organic
Farming.
[Online],
Available
https://www.gov.uk/government/collections/organic-farming (Accessed: 20 May 2016).
at:
Euro
Stat
(2016)
Organic
Farming.
[Online],
http://ec.europa.eu/eurostat/data/database (Accessed: 6 April 2016).
at:
Soil
Association
(2016)
Organic
market
report
2016.
http://www.soilassociation.org/marketreport (Accessed: 13 April 2016).
Available
Available
at
Cover photo: Courtesy of an anonymous LFA (SDA) farm
91
Organic Farming in England 2014/15
92